New Jersey Takes Prediction Market Fight to Supreme Court

Coindesk reported that New Jersey is asking the Supreme Court to settle who gets to regulate sports prediction markets, just days after a federal appeals court handed Kalshi a major loss in Nevada and created a split between two circuits.

What’s the scoop?

• New Jersey Goes to SCOTUS: New Jersey petitioned the Supreme Court on Tuesday, becoming the first state to ask the high court to decide whether states can regulate sports prediction markets offered by federally regulated platforms like Kalshi. The state is challenging an April ruling that blocked it from applying its gambling laws to Kalshi.
• The Core Question: New Jersey wants the Court to decide whether the 2010 Dodd-Frank Act stripped states of their authority to regulate sports bets when those contracts trade on markets registered with the CFTC. The Third Circuit sided with Kalshi 2-1 in April, finding that federal commodities law preempted New Jersey's gambling rules.
• Why Now?: Last Friday, the Ninth Circuit ruled against Kalshi in its fight with Nevada, finding Kalshi was unlikely to show that federal commodities law prevents Nevada from applying its gambling regulations to sports contracts. The unanimous decision directly conflicts with the Third Circuit's New Jersey ruling, creating a circuit split over state authority.
• Supreme Court Showdown?: That split substantially raises the odds that the Supreme Court eventually steps in to settle the issue. Even the CFTC said after the Ninth Circuit decision that the conflict calls for Supreme Court resolution, though New Jersey's petition does not guarantee the Court will take the case.