State lawmakers urge Supreme Court to hear Kalshi sports betting case

State lawmakers ask the Supreme Court to hear the Kalshi dispute

A group of US state lawmakers is asking the Supreme Court to take up a legal fight between prediction market platform Kalshi and New Jersey gaming authorities. The National Council of Legislators from Gaming States (NCLGS) filed a brief on Tuesday supporting New Jersey's request for the court to review the case.

Prediction markets are platforms where users trade contracts tied to the outcome of future events. The dispute centers on whether state gaming officials or federal agencies should oversee these companies.

Key points from the filing

• The NCLGS filed an amicus brief, which is a filing by a group that is not a party to a case but wants to share its view with the court.
• The brief backs New Jersey's Attorney General and gaming authorities, who asked the Supreme Court to hear the case in a petition filed on Sept. 2.
• The petition followed a decision from the US Court of Appeals for the Third Circuit, as part of New Jersey's appeal.
• Kalshi has until Nov. 9 to file a brief stating its position.
• It is not yet known whether the Supreme Court will accept the case.

What the gaming legislators told the court

In its filing, the NCLGS argued that a ruling in Kalshi's favor would "render states powerless" to regulate sports betting on prediction markets, causing "substantial harm and confusion." The group said gaming-related matters should be left to individual US state authorities.

"If Kalshi's self-described 'sports betting' activities are deemed beyond state regulation, then casinos, pari-mutuel operators, and other heavily regulated entities are certain to amend their business and products to seek the same status," the lawmakers wrote. "Entire state regulatory regimes surrounding this vice activity will have to be reconsidered in light of any preemption found in this area."

The filing did not address the competing argument that event contracts traded on federally regulated markets fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC), the US federal agency that regulates futures and derivatives markets.

Where Kalshi stands

Kalshi has not filed an official response to the Supreme Court petition. After the initial filing by New Jersey, a Kalshi spokesperson told Cointelegraph that the company could not be "regulated by 50 different regulators."

What is still unclear

The Supreme Court has not yet said whether it will hear the case. The NCLGS brief also did not respond to the argument about federal jurisdiction over event contracts. At the center of the dispute is the question of whether state authorities or federal agencies have jurisdiction over prediction market companies.

Why this matters

The source material states that if the Supreme Court accepts the case, a ruling could bring clarity for state and federal officials over sports bets made through prediction markets. A decision favoring Kalshi would also affect how states regulate sports betting more broadly, according to the lawmakers' brief.

Sources

• Cointelegraph