New Jersey is asking the Supreme Court to rule on the legality of states regulating sports betting on prediction markets like Kalshi, arguing that such companies are federalizing the industry at the expense of state laws.
In April, the US Court of Appeals for the 3rd Circuit ruled that New Jersey cannot regulate sports bets on prediction markets, deeming them 'swaps' and giving the CFTC exclusive jurisdiction.
The 9th Circuit, however, ruled that Nevada can stop Kalshi from allowing sports bets, disagreeing with the 3rd Circuit's interpretation. This split raises the question of who gets to regulate the multi-billion-dollar sports betting industry.
New Jersey’s petition cites litigation across at least 20 states, with numerous suits pending and several state gambling laws currently enjoined by federal courts. The petition asks the Supreme Court to decide on the legality of offering sports wagers without following state laws, certified by the CFTC.
The circuit split dramatically increases the likelihood of the Supreme Court stepping in to resolve the issue, but Kalshi reportedly won’t allow bets on the case.
