New Jersey asks US Supreme Court to rule on prediction market regulation
New Jersey has asked the U.S. Supreme Court to decide who has the authority to regulate sports betting on prediction markets, a type of platform where users bet on the outcome of future events.
The state’s Attorney General, Jennifer Davenport, filed a 332-page petition on Wednesday requesting the Court review a lower court’s decision in a case involving prediction markets platform Kalshi. The dispute began last year when New Jersey ordered Kalshi to stop offering sports betting, arguing it violated state gambling laws. Kalshi sued, and a federal appeals court later ruled in its favor.
Now, New Jersey wants the Supreme Court to weigh in, arguing that states should retain the right to regulate gambling within their borders.
New Jersey’s argument
Davenport stated that states have long-standing laws to prevent issues like compulsive gambling, underage betting, and insider trading in sports. She said Congress did not intend to strip states of their authority over such matters.
“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,” Davenport said.
Kalshi’s response
A spokesperson for Kalshi disagreed with New Jersey’s filing, stating that the platform operates as a nationwide financial exchange and cannot be subject to 50 different state regulators.
“Kalshi is an open, nationwide financial exchange. It cannot be regulated by 50 different regulators,” the spokesperson said.
Broader legal battles
The case is part of a larger conflict between states and the Commodity Futures Trading Commission (CFTC), the federal agency overseeing derivatives markets. The CFTC has argued it has exclusive jurisdiction over prediction markets, while states maintain that these platforms can fall under gambling laws.
Last week, a separate appeals court ruled against Kalshi in Nevada, stating the company failed to prove that the CFTC’s authority overrides Nevada’s right to regulate sports betting.
What happens next
The Supreme Court will now decide whether to grant New Jersey’s petition and hear the case. If accepted, the Court’s ruling could clarify whether states or the federal government hold regulatory power over prediction markets.
