New Jersey is asking the U.S. Supreme Court to decide how much control states have over prediction markets, escalating a legal fight over sports betting and federal oversight.
The state filed its petition Tuesday after the Third Circuit ruled in favor of Kalshi, finding that federal law blocked New Jersey from applying its gambling rules to the platform.
The case centers on whether the federal Commodity Exchange Act takes priority over state laws governing sports betting. The outcome could affect prediction markets across the US.
Prediction Market Rules Face Split
The case highlights a split among federal appeals courts. The Ninth Circuit recently reached a different conclusion in Nevada, finding that the Commodity Exchange Act likely does not prevent states from regulating sports contracts.
The conflicting rulings could push the Supreme Court to clarify how federal and state authority applies to prediction markets.
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New Jersey officials have argued that prediction-market operators must comply with state gambling laws when offering sports contracts.
The Supreme Court is not required to take the case. Other lawsuits involving prediction markets are also moving through the courts and could develop further before the justices intervene.
Kalshi Defends Federal Authority
Kalshi CEO Tarek Mansour has expressed confidence in the company’s legal position. The dispute turns on whether sports contracts offered by prediction markets fall under federal derivatives rules.
A Supreme Court ruling could determine how states and federal regulators oversee sports-related prediction contracts and the broader prediction market industry.
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