The U.S. state of New Jersey is taking its dispute with prediction market platforms all the way to the nation’s highest court, as per reports.
The state’s Attorney General, Jennifer Davenport, along with the interim director of the Division of Gaming Enforcement, filed a petition on Wednesday asking the US Supreme Court to weigh in on a question that has divided federal courts: whether individual states or federal regulators have the final say over companies offering prediction markets tied to sports outcomes.
The 332-page filing is a petition for a writ of certiorari, the formal mechanism parties use to request Supreme Court review of a lower court ruling. It traces back to a dispute that began last year, when New Jersey issued a cease-and-desist order to Kalshi, accusing the trading platform of running afoul of the state’s gambling statutes.
According to the petition, New Jersey isn’t alone in this fight. Gaming regulators in at least 20 states have filed civil cases raising similar concerns, and officials want the Supreme Court to settle once and for all whether a company can simultaneously satisfy federal Commodity Futures Trading Commission requirements while still breaking state gambling laws.
The filing points to a deeper legal problem underlying all of this litigation: appellate courts can’t agree. New Jersey describes what it calls a clear and unresolved conflict between the Third and Ninth Circuit Courts of Appeals over how to handle these cases. The petition characterizes the stakes as significant, warning that the outcome will determine whether an industry worth billions of dollars can sidestep state-level sports gambling regulations entirely.
At the heart of the legal dispute is a question of federal preemption. New Jersey’s petition asks whether the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in 2010, strips states of their authority to regulate sports wagering that happens within their borders, simply because the platforms offering those bets are registered with the Commodity Futures Trading Commission(CFTC).
Davenport didn’t mince words in a public statement accompanying the filing. She argued that platforms like Kalshi want the benefits of operating nationwide without submitting to the rules any individual state has put in place. She noted that companies claim to legally offer sports betting across all 50 states while ignoring each state’s own gambling regulations, a contradiction she said has drawn opposition from states spanning the political spectrum.
Davenport pointed to the underlying purpose of state gambling laws, including safeguards against problem gambling, protections for minors, and rules aimed at preventing insider misconduct tied to sporting events. She said the goal of the petition is to get the SC to affirm that Congress never intended to exempt the sports betting industry from state oversight without saying so explicitly.
