The National Council of Legislators from Gaming States has backed New Jersey’s request for the U.S. Supreme Court to decide whether the state can enforce its sports-betting laws against Kalshi’s sports-event contracts.
In an amicus brief, the lawmakers’ group argued that federal oversight of Kalshi’s Commodity Futures Trading Commission-registered exchange does not put sports-related gambling beyond state regulation. The council, whose members commonly serve on state gaming committees, said gambling regulation has traditionally been exercised by states and that the Third Circuit’s approach threatens that arrangement.
As we reported on Sept. 2, New Jersey had asked the Supreme Court to resolve whether the 2010 Dodd-Frank Act preempts state regulation of sports bets offered through CFTC-registered markets.
Kalshi offers contracts tied to the results of sports games and other events. New Jersey’s Division of Gaming Enforcement treats its sports contracts as wagers requiring a state licence, and ordered the company to stop offering them in the state in March 2025. Kalshi sued, maintaining that the contracts are federally regulated swaps that can be offered without complying with state gambling rules.
A divided Third Circuit panel upheld a preliminary injunction blocking New Jersey from applying its laws to Kalshi while the underlying case proceeds. The 2-1 ruling found Kalshi was likely to succeed on its federal-preemption argument.
The council’s brief said a ruling insulating such contracts from state authority could unsettle state laws, regulations and negotiated tribal gaming compacts. It argued that states have adopted distinct rules governing where and how bets are placed, as well as integrity protections, and warned against a national, one-size-fits-all outcome.
New Jersey’s rules require bettors to be at least 21, provide for self-exclusion and problem-gambling information, and bar athletes, coaches, referees and others with inside information from betting. Sports-pool operators must demonstrate financial stability and may be investigated and audited by regulators.
The brief focused on a conflict between the Third Circuit and the Ninth Circuit, which held in an Aug. 28 Nevada case that Kalshi had not shown federal law was likely to override state gambling restrictions. That split has since widened: the Sixth Circuit ruled that Ohio and Tennessee may regulate Kalshi’s sports-event contracts under their gambling laws, holding both that the contracts are not swaps and that the Commodity Exchange Act would not preempt state law even if they were.
New Jersey’s petition says litigation over prediction-market sports wagering has involved at least 20 states. Kalshi’s response to the state’s Supreme Court petition is due Nov. 9. If the court grants review, it will consider New Jersey’s power to apply its sports-betting laws to the contracts, though a grant alone would not change what Kalshi may offer in the state.
