The American Gaming Association has filed an amicus brief urging the U.S. Supreme Court to review a ruling that prevents New Jersey from applying its gaming laws to Kalshi’s sports-event contracts. The trade group said the Third Circuit decision would allow prediction-market platforms to bypass state sports-betting rules while offering products it regards as unlicensed wagers.
The case asks whether the 2010 Dodd-Frank Act displaced state authority over sports bets offered through markets registered with the Commodity Futures Trading Commission. In April, the Third Circuit ruled 2-1 that New Jersey’s gambling laws were preempted as applied to Kalshi’s sports wagers, and upheld a preliminary injunction against enforcement by the state’s Division of Gaming Enforcement.
The appeals court held that Kalshi’s sports-related event contracts were swaps traded on a CFTC-licensed designated contract market, placing them within the agency’s exclusive jurisdiction. New Jersey disputes that conclusion, arguing that Kalshi self-certifies sports wagers with the CFTC without complying with state gambling law.
The AGA called the outcome “disruptive” and argued there was no credible evidence Congress intended Dodd-Frank to have such a destabilising effect. It said the ruling threatens state protections for minors, responsible gambling, advertising and college-sports wagering, while putting licensed operators, tribes and consumers at a disadvantage.
The association also argued that prediction markets gain an unfair advantage by avoiding the state taxes, licensing obligations and responsible-gambling requirements imposed on regulated sportsbooks. It said its members have structured their businesses around state and tribal regulation, and that a nationwide exemption for prediction-market sports offerings would weaken those frameworks.
New Jersey has said the dispute has consequences well beyond its own market. Litigation concerning prediction-market sports wagering has spread to at least 20 states, with dozens of active cases and several state laws enjoined by federal courts. The state attorney general’s office said 95% of Kalshi’s 2025 revenue came from sports betting.
The AGA cited conflicting appellate outcomes as a reason for prompt Supreme Court intervention. The Third, Sixth and Ninth Circuits have reached different conclusions on whether sports-event contracts remain subject to state gambling laws or fall exclusively under federal commodities regulation; the Ninth Circuit ruled on Aug. 28 that bets on sporting-event outcomes were not within the CFTC’s exclusive jurisdiction.
The intervention follows a joint amicus brief from the International Association of Gaming Regulators and the North American Gaming Regulators Association supporting New Jersey’s petition, as reported Oct. 2. A bipartisan coalition of 39 state attorneys general has also backed New Jersey’s request for review.
