On Tuesday, New Jersey escalated its ongoing battle against prediction markets to the United States Supreme Court by submitting a petition for a writ of certiorari, requesting that the highest court determine how prediction markets ought to be regulated.
This legal step arrives several months after the Third Circuit Court of Appeals decided that the Commodity Exchange Act overrides state gambling statutes, delivering a legal victory to prediction market platform Kalshi, which had initiated litigation against New Jersey. Over the past two years, various state and federal courts have addressed prediction market lawsuits, and their judicial decisions are starting to diverge.
“Whether the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act preempted States from regulating sports bets that occur within their jurisdictions if those bets are offered on markets registered with the Commodity Futures Trading Commission,” poses the central inquiry at the beginning of New Jersey’s petition.
Prediction market operators “have no right to offer their sports bets without following state law,” declared New Jersey Attorney General Jennifer Davenport in an official statement.
The Third Circuit Court of Appeals determined this past April that Kalshi’s services fell under the jurisdiction of the federal Commodity Exchange Act, which consequently superseded New Jersey state gambling legislation.
The 2-1 appellate panel majority decision highlighted the CFTC, noting that the agency had failed to conclude that Kalshi’s sports-centric offerings ran counter to the public good. Meanwhile, the dissenting judge argued that the specific products hosted on Kalshi’s network were fundamentally sports wagers.
Nevertheless, just last week, the Ninth Circuit Court of Appeals — a judicial district encompassing states such as Nevada — concluded that the CEA “likely does not preempt” state regulations regarding sports contracts, thereby creating a circuit split.
Following that verdict, CFTC representative Zach Fulton communicated via email to CoinDesk that the ruling “call[ed] out for resolution by the Supreme Court.”
New Jersey’s filing of a writ of certiorari does not guarantee that the Supreme Court will accept the case. Numerous other state and federal litigations are currently reviewing this identical question, and the apex court might decide to hold off until some of those proceedings begin to reach conclusions before intervening.
Originally published at https://www.coindesk.com/policy/2026/09/02/new-jersey-becomes-first-state-to-ask-supreme-court-to-weigh-in-on-prediction-markets.
