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New Jersey Takes Kalshi Sports Betting Fight to Supreme Court

By jili tutorial · September 4, 2026

New Jersey Takes Kalshi Sports Betting Fight to the Supreme Court

The Garden State warns that Kalshi’s legal argument could have ramifications far beyond prediction markets, potentially reaching traditional sportsbooks and casinos. New Jersey has asked the U.S. Supreme Court to decide whether prediction markets can offer sports event contracts without complying with state gambling laws, aiming to resolve a direct split between federal appeals courts over Kalshi’s business model.

On September 2, New Jersey filed a petition for a writ of certiorari, asking the Supreme Court to determine “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 (CFTC).”

The legal landscape is sharply divided. The Third Circuit ruled 2-1 in April that Kalshi’s sports contracts qualify as swaps under federal commodities law, meaning New Jersey’s gambling rules are preempted. However, just last week, the Ninth Circuit reached the opposite conclusion in Kalshi’s Nevada litigation, holding that the contracts are not swaps and that Nevada’s gambling laws remain in force. New Jersey calls this disagreement a “direct, acknowledged, and irreconcilable split” and argues that Supreme Court intervention is now essential.

“Companies like Kalshi claim to offer legal sports betting in all 50 States, but they refuse to follow the gambling laws of any State,” New Jersey Attorney General Jennifer Davenport wrote in the petition. “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.”

Could Kalshi’s Logic Apply to Traditional Casinos?

Beyond the circuit split, New Jersey argues that Kalshi’s interpretation of federal law could have sweeping consequences. The Third Circuit concluded that Kalshi’s sports event contracts fall within the Commodity Exchange Act’s definition of swaps, and the Dodd-Frank Act prohibits offering swaps outside CFTC-regulated markets. The state contends that if Kalshi is correct—that Dodd-Frank federalized sports wagering regulation—then sportsbooks operating legally since the Supreme Court overturned the federal sports betting ban in Murphy v. NCAA (2018) “have apparently been violating Dodd-Frank all along.”

Judge Jane Roth raised the same concern in her dissent from the Third Circuit ruling. She warned that treating sports bets as swaps would stretch the definition to its “logical extreme,” because swaps traded outside CFTC-registered markets are generally unlawful. New Jersey also argues that the Third Circuit’s interpretation could disrupt the tribal gaming framework under the Indian Gaming Regulatory Act and federal laws such as the Wire Act.

The dispute has escalated significantly since Kalshi began offering sports contracts in January 2025. New Jersey’s petition notes that Kalshi, other prediction market companies, and the CFTC are now involved in litigation with 20 states. The state also highlights broader opposition from 44 states, as well as hundreds of tribes, casinos, and public officials.

A separate tally by gaming attorney Daniel Wallach identified 39 judicial decisions in prediction market disputes—33 favoring states and 6 siding with prediction market interests. Including Michigan’s September 1 preliminary injunction against Kalshi, the total has since risen to 40 decisions, with 34 favoring states. (This count spans preliminary injunctions, temporary restraining orders, appellate stays, and other rulings, not 40 separate final judgments.)

Kalshi has pushed back against New Jersey’s petition. Company representatives told multiple media outlets that it views itself as a nationwide financial exchange that cannot be subject to 50 different state regulatory regimes. “Kalshi is an open, nationwide financial exchange. It cannot be regulated by 50 different regulators,” said Dani Lever, Kalshi’s Head of Strategic Communications. “We remain confident in the lower courts’ rulings, and nothing in New Jersey’s filing today changes our view.” Kalshi has also argued that the Ninth Circuit did not reject the principle of the CFTC’s exclusive jurisdiction; rather, it reached a different conclusion based on a federal regulation the agency is currently rewriting.

Supreme Court Review Is Not Guaranteed—or Quick

Filing the petition does not guarantee the Supreme Court will hear the case. The justices must first decide whether to grant certiorari, a process that can take months. New Jersey’s last major sports betting case, Murphy v. NCAA, offers a timeline example. The state filed its Supreme Court petition challenging the federal sports betting ban in October 2016. The Court granted review in June 2017, heard arguments that December, and issued its decision in May 2018.

A similar timeline could push a final decision in the Kalshi dispute well into 2027 or even 2028. Even if the Court grants New Jersey’s petition during the current term, briefing and arguments would still need to take place before a ruling. If the Court does take the case, its eventual decision could provide the first nationwide answer to the central question: whether CFTC-registered exchanges can offer sports contracts regardless of state gambling law.