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New Jersey asks Supreme Court to police Kalshi sports prediction markets
Photo by Mr. Kjetil Ree. / Wikimedia Commons, CC BY-SA 3.0 · source
The state petition cites a 3rd–9th Circuit split over whether CFTC-registered event contracts preempt state gambling law.
New Jersey on Sept. 2 asked the U.S. Supreme Court to decide whether federal commodities law bars states from regulating sports bets on Kalshi and similar prediction markets. The 3rd Circuit sided with Kalshi in April; the 9th Circuit last week allowed Nevada to treat the contracts as gambling. Kalshi says only the CFTC can regulate a nationwide exchange. The justices have not yet agreed to hear the case.
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Disputed opinions
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New Jersey asks Supreme Court to resolve fight over Kalshi's future
2 Sep 2026
Facts
The legal battle has pitted dozens of states against the prediction-market sector.
New Jersey AG lawyers argued the Commodity Exchange Act does not let prediction-market operators ignore state law.
The petition said the Act does not make the CFTC the sole sports-gambling regulator or give companies a pass from 50 state laws by listing bets on a CFTC market.
The attorneys wrote that states have always held primary police powers for health and safety, including gambling.
Kalshi-style sites take wagers on events from earnings-call remarks to election outcomes.
FanDuel and DraftKings, which pay billions in state taxes, have been among the prediction-market industry’s antagonists.
Opinion
If the Supreme Court takes New Jersey’s petition, NPR says the case would have sweeping implications for prediction markets.
Those sportsbooks view the prediction sites as fast-growing rivals that are cutting corners.
New Jersey Takes Its Fight Against Kalshi to the Supreme Court
2 Sep 2026
Facts
No unique facts.
Opinion
NOTUS said Kalshi has been bombarded with those challenges.
New Jersey becomes first state to ask Supreme Court to weigh in on prediction markets
2 Sep 2026
Facts
The appeals court ruled 2-1.
The majority said the CFTC had not determined Kalshi’s sports products were contrary to the public interest.
The dissenting judge said Kalshi’s products were just sports bets.
Dozens of other state and federal cases examine the same question.
The Supreme Court may wait for some of those cases to start resolving before taking this one.
Opinion
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New Jersey asks the Supreme Court to take on prediction markets
2 Sep 2026
Facts
The petition said Kalshi claims that sports bets on a CFTC-registered market make state sports-gambling laws fall away.
The CFTC views sports event contracts as swaps, while 44 state attorneys general say they are sports betting under state authority.
Kalshi said it disagrees with New Jersey's filing.
Forty-four state attorneys general say the contracts amount to sports betting.
The 9th Circuit rejected Kalshi and Crypto.com's appeal for an injunction against the Nevada Gaming Control Board.
Bank of America said the 3rd and 9th Circuit conflict gives the Supreme Court a chance to decide which regulator oversees prediction markets.
The petition said the Third Circuit's decision is profoundly important and profoundly wrong.
Bank of America said the Supreme Court might wait until next year because other circuits still have cases.
DraftKings and Flutter Entertainment shares were up more than 5% after New Jersey filed the petition.
Opinion
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SCOTUS should weigh in on prediction markets, says New Jersey AG who wants to shut down sites like Kalshi, Polymarket
2 Sep 2026
Facts
New Jersey is asking the Supreme Court to weigh in for the first time on regulation of prediction markets like Kalshi and Polymarket.
Davenport said states have long regulated gambling to prevent compulsive gambling, betting by minors, and insider trading on sports.
Bipartisan state attorneys general, Native tribes, and the casino industry want prediction markets under state casino and sportsbook laws.
Critics argue the sites operate as unlicensed sportsbooks, skirting state laws and taxes and letting younger bettors on.
Trump wrote that it is critically important the CFTC’s exclusive authority over prediction markets is maintained so they will thrive.
The Supreme Court is likely to decide in the fall whether to take the case.
The industry is overseen by the federal CFTC.
Davenport moved last year to shut down prediction markets in New Jersey.
A Polymarket US spokesperson said prediction markets are regulated by the CFTC under a federal framework, not a patchwork of state rules.
The 9th Circuit said Kalshi’s sports event contracts have the hallmarks of sports betting.
The decisions in those fights have been mixed.
Critics say the sites are open to 18-year-olds, below many states’ 21 gambling age, because they are treated as financial markets.
Adults 18 to 21 have traded $5.4 billion on Kalshi this year, including about $3.9 billion in sports and parlays, a CNN analysis found.
Kalshi controls an estimated 90% of the U.S. prediction-platform market.
Selig dismissed a request from the NCAA, NFL, NBA, PGA Tour and other leagues to raise the minimum trading age to 21.
Polymarket is the second-largest U.S. prediction market.
The CFTC weighed in on the Nevada case, arguing state regulators have no control over the platforms.
Advocates argue 18-year-olds already have access to risky financial markets.
Kalshi has added deposit limits and warnings for users with risky-behavior patterns.
Donald Trump Jr. is an investor and adviser to Polymarket and an adviser to Kalshi.
A spokesperson for Trump Jr. said he does not lobby federal officials on behalf of the sites.
Opinion
The Post said a ruling could pave the way for New Jersey to shut the sites down.
The Post said state oversight could be a major setback for the companies.
The Post said Selig has taken a friendly approach to prediction markets.