Prediction Markets Weekly Roundup: New Jersey Goes to Supreme Court as NFL Pressures Exchanges

By jili tutorial · September 5, 2026

Prediction Markets Weekly Roundup: New Jersey Takes Kalshi Fight to Supreme Court as NFL Pressures Exchanges

A whirlwind of court rulings, league scrutiny, and regulatory actions defined another pivotal week for prediction markets, even as the sector continues to attract major investment and expand its reach. From New Jersey’s Supreme Court petition against Kalshi to the NFL’s renewed call to remove certain contracts, here are the top developments shaping the industry.

Litigation Update: Prediction Market Cases Headed to Higher Courts

New Jersey Asks Supreme Court to Decide Gambling Law Jurisdiction

New Jersey has petitioned the U.S. Supreme Court to determine whether states can apply their own gambling laws to sports event contracts offered on CFTC-regulated exchanges. The move follows conflicting rulings from two federal appellate courts.

In April, the Third Circuit ruled 2–1 that Kalshi’s sports contracts qualify as swaps under federal law, meaning federal preemption blocks New Jersey’s gambling regulations. But just last week, the Ninth Circuit reached the opposite conclusion in a separate Nevada case. There is no guarantee the Supreme Court will take up New Jersey’s petition; some legal analysts expect the justices to wait for additional appellate decisions before deciding.

Michigan Judge Extends Ban on Kalshi Sports Contracts

A Michigan judge granted a preliminary injunction on September 1 requiring Kalshi to keep its sports event contracts unavailable in the state while litigation continues. The order extends restrictions first imposed through a temporary restraining order in June. Kalshi must now use a third-party geolocation provider licensed by the Michigan Gaming Control Board to block Michigan users. Noncompliance could result in a $500,000‑per‑day penalty.

Ninth Circuit Ruling Echoes Across Multiple State Cases

The Ninth Circuit’s Nevada decision is already being cited by other states in prediction market lawsuits. This week Ohio, Iowa, and Utah filed the ruling as supplemental authority, following similar filings from Rhode Island and Illinois last week. The August 28 decision rejected Kalshi’s argument that its sports event contracts are swaps under the Commodity Exchange Act, thus falling under the CFTC’s exclusive jurisdiction.

Novig’s New Mexico Case Stayed Until 2027

A federal court granted a joint request to stay Novig’s lawsuit against New Mexico until August 13, 2027. The order allows Novig to operate in the state for the next year. Last week, Novig also secured a stay in its case against Massachusetts officials, which will remain in effect until the Massachusetts Supreme Judicial Court rules on Kalshi’s appeal of a preliminary injunction barring it from offering unlicensed sports event contracts.

Kalshi Adjusts Contracts Amid CFTC and NFL Pressure

Kalshi Removes American Odds and Athlete Injury Markets

The exchange made two notable changes this week in response to CFTC guidance.

First, Kalshi removed American‑style odds (i.e., plus/minus pricing) from its platform. The regulator had warned that sportsbook‑style pricing could mislead users about the nature of event contracts. Kalshi now displays prices only in cents, percentages, or multiplier formats. Other prediction markets have followed suit.

Second, Kalshi pulled all contracts tied to athlete injuries after the CFTC asked it to stop offering them. Those markets included questions about how long players would be sidelined and whether specific NFL players would participate in Week 1 games.

NFL Renews Call to Remove ‘Objectionable’ Contracts

As Kalshi removed injury‑related markets, the NFL stepped up its pressure. In a letter, NFL Chief Compliance Officer Sabrina Perel reiterated concerns first raised in March, saying the league is “deeply concerned” that contracts within previously flagged categories continue to appear on exchanges.

The NFL objects to contracts involving player injuries, misconduct, fan safety, officiating, roster and personnel decisions, and other outcomes that may be knowable in advance. The league also flagged certain game‑related propositions and contracts tied to broadcast mentions or celebrity attendance as susceptible to manipulation.

Enforcement: Kalshi Bans Five Traders, Including George Santos

Kalshi disclosed five disciplinary actions against traders who violated exchange rules. Three political candidates who traded contracts tied to their own elections received three‑year bans. Former U.S. Representative George Santos was permanently banned after the exchange discovered he had manipulated markets. A fifth case involved a trader improperly accessing another user’s account.

New Legislation Takes a Different Approach to Prediction Markets

Prediction markets also drew attention from lawmakers at both the federal and state levels.

Representative Eugene Vindman introduced H.R. 10199, the Sell Your Stocks or Step Down Act. The bill would prohibit the President, Vice President, members of Congress, senior executive officials, federal judges, and certain family members from owning or trading a broad range of investments—including prediction market contracts.

In Illinois, Representative Travis Weaver introduced HB 5811 on September 2 to repeal the state’s exchange wager transaction tax. The current law imposes a 1.75% tax on exchange wagers, rising to 3.5% after a licensee’s first five million exchange wagers in a fiscal year.

Investment and Expansion: Polymarket Valued at $21 Billion, New Partnership and Language Rollout

Trump Jr.’s 1789 Capital Leads $1 Billion Polymarket Round

Donald Trump Jr.’s 1789 Capital is leading a new $1 billion funding round for Polymarket, valuing the prediction market company at approximately $21 billion. The investment firm is expected to contribute roughly $300 million, having previously invested about $200 million in Polymarket. Trump Jr., a partner at 1789 Capital, also serves as an adviser to the company.

Alpaca Partners with Kalshi

Brokerage platform Alpaca has partnered with Kalshi to make event contracts available through its financial infrastructure. Alpaca said it will offer CFTC‑regulated event contracts using the same infrastructure its partners already use for stocks, options, fixed income, and cryptocurrency. The network covers more than 300 financial institutions and 14 million brokerage accounts. Alpaca Derivatives recently registered with the CFTC as a futures commission merchant, though it has not yet begun regulated FCM operations.

Kalshi Expands Platform into Spanish

Kalshi launched its platform in Spanish, aiming to reach more users in the U.S. and internationally. Spanish is the first additional language supported across the platform, following Kalshi’s rapid growth over the past year. Co‑founder Luana Lopes Lara announced the expansion as part of efforts to make prediction markets accessible to a broader audience.

“Kalshi ya está totalmente disponible en español. Esta era una de las funciones que más nos pedían nuestros usuarios…” — Luana Lopes Lara (@luanalopeslara), September 2, 2026