On September 2, 2026, New Jersey filed a petition asking the U.S. Supreme Court to rule on whether states can regulate sports contracts offered by prediction market operators.
The petition was filed by Attorney General Jennifer Davenport after the Third Circuit Court of Appeals rejected the state’s case against Kalshi, ruling that the operator’s sports contracts are swaps under federal law and that the Commodity Futures Trading Commission (CFTC) has exclusive authority over them.
Now, New Jersey is asking the Supreme Court to overturn that decision, with officials arguing that sports contracts offered by prediction markets must be classified as sports bets and follow the same gambling laws as licensed sportsbooks.
Attorney General Davenport stated:
“Companies like Kalshi claim to offer legal sports betting in all 50 states, but they refuse to follow the gambling laws of any state. These companies have no right to offer their sports bets without following state law, which is why dozens of states across the ideological spectrum have opposed them. We’re calling on the Supreme Court to resolve this issue and recognize that Congress did not silently make the sports-betting industry immune from state law.”
Additionally, the petition was filed just days after the Ninth Circuit Court reached the opposite conclusion in a similar case in Nevada regarding Kalshi, where the court decided the federal law doesn’t prevent the state from enforcing its gambling rules against the operator. The clashing decisions have created a split between the two federal appeals courts, which has also given the Supreme Court a reason to actually consider the issue.
