Amid escalating conflicts between state authorities and the federal government, New Jersey is seeking a definitive ruling from the U.S. Supreme Court on the oversight of sports wagering within prediction markets.
New Jersey Attorney General Jennifer Davenport submitted a 332-page petition for a writ of certiorari on Wednesday, formally requesting that the nation’s highest court evaluate an earlier appellate decision. The legal action originated in the previous year after New Jersey issued a cease-and-desist notice to prediction market platform Kalshi, alleging the service ran afoul of local gaming regulations.
In response, Kalshi initiated legal action against New Jersey, with the litigation proceeding to the U.S. Court of Appeals for the Third Circuit, which ultimately determined the outcome in Kalshi’s favor.
At present, New Jersey is petitioning the Supreme Court to intervene in the matter. The presiding justices must determine whether they will accept the petition and review the legal conflict.
“States have long adopted careful laws to regulate gambling, including to prevent compulsive gambling, gambling by minors, and insider trading on sports games,” Davenport stated. “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.”
A representative for Kalshi indicated that the company challenges the position taken in New Jersey’s petition.
“Kalshi is an open, nationwide financial exchange. It cannot be regulated by 50 different regulators,” the representative stated via an emailed message.
Multiple legal fights
Over the course of the past year, the Commodity Futures Trading Commission and individual states have been tangled in several courtroom battles. State regulators have raised growing alarms regarding prediction markets, particularly platforms listing sports-related event contracts. Jurisdictions maintain that such contracts constitute gambling and directly infringe upon state gaming statutes.
Conversely, the CFTC, which regulates derivatives trading under the provisions of the Commodity Exchange Act, asserts that it maintains “exclusive jurisdiction.” Led by CFTC Chair Michael Selig, the regulatory body has initiated lawsuits against multiple states while proposing a regulatory model tailored for prediction markets.
Even so, Kalshi faced a setback during the prior week when an appellate panel upheld a lower court decision concluding that the platform failed to prove CFTC authority overrides Nevada’s jurisdiction over sports gambling.
The CFTC did not provide an immediate response when asked for comment.
Originally published at https://www.theblock.co/news/regulation/2026-09-02-new-jersey-asks-supreme-court-to-decide-who-regulates-sports-betting-on-prediction-markets-413398.
