Full story
New Jersey to SCOTUS
New Jersey filed a petition for a writ of certiorari asking the U.S. Supreme Court to decide whether states can regulate sports betting conducted through prediction markets operated by Kalshi and other platforms.
“New Jersey authorities on Wednesday asked the U.S. Supreme Court to resolve whether states have the power to police sports betting”
The state’s filing seeks to overturn an appellate decision in April that held the U.S. Commodity Futures Trading Commission has exclusive jurisdiction over the sports-related event contracts Kalshi allows people to trade on its platform.
New Jersey Attorney General Jennifer Davenport said in a statement, "These companies have no right to offer their sports bets without following state law," as the dispute over federal versus state authority has produced conflicting rulings at the appellate level.
The Reuters account says the petition was filed on Wednesday, Sept 2, and that Kalshi did not immediately respond to a request for comment.
Reuters also reported that the legal fight has been driven by the argument that Dodd-Frank, adopted after the 2008 financial crisis, shifted authority over sports wagering away from states to the CFTC when it was directed to regulate "swaps."
Kalshi pushes back
Kalshi’s position, as described by The Hill, is that the company disagrees with New Jersey’s filing and argues that its platform cannot be regulated by multiple regulators.
In a statement, Kalshi spokesperson Dani Lever said, "Kalshi is an open, nationwide financial exchange. It cannot be regulated by 50 different regulators," and added that the company remains confident in lower-court rulings.
The Hill also reported that the New Jersey petition comes less than a week after the Ninth Circuit ruled in a case involving Nevada that states can oversee Kalshi, diverging from the Third Circuit’s earlier decision in New Jersey’s case.
Reuters reported that at least four states—Nevada, Massachusetts, Michigan and Washington—have won court orders restricting Kalshi’s activities, as the Supreme Court question grows more urgent.
The Hill further said the dispute has resulted in conflicting decisions at the appellate level and that it was the first time the dispute had been raised to the justices.
What’s at stake
New Jersey’s petition frames the stakes as whether a multi-billion-dollar sports-gaming industry can operate under federal oversight alone or remains subject to state gambling laws.
“recognize that Congress did not silently make the sports-betting industry immune from state law”
The Hill quoted Davenport saying, "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," as she argued the Commodity Exchange Act does not allow prediction market operators to ignore state law.
NPR reported that New Jersey’s lawyers argued, "Nothing in the Act gives the CFTC unprecedented authority to become the sole regulator of sports gambling in this country," and said the request follows split decisions by federal appeals courts.
The Reuters account said New Jersey argues Dodd-Frank is "not nearly clear enough" to transfer authority over a multi-billion-dollar sports-gaming industry to a federal agency with no gambling expertise.
The Hill also described the practical conflict as a question of whether Kalshi can offer sports event contracts nationwide under federal law or whether state gambling regulations and taxes still apply.