New Jersey asks the Supreme Court to hear its prediction markets fight after Third Circuit loss

Eight years after helping trigger the end of PASPA, New Jersey is back at the US Supreme Court, this time arguing that sports event contracts on CFTC-registered markets still fall under state sports betting law. For high-risk operators, the key issue is not just Kalshi versus one state: it is whether prediction markets can keep building a nationwide sports-betting product without 50 separate state regimes.

1. On Wednesday, New Jersey Attorney General Jennifer Davenport said her office filed a petition for writ of certiorari after a 2-1 Third Circuit Court of Appeals decision in April came down in favour of prediction markets. New Jersey had until Thursday to file.
2. The petition asks whether the Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010 after the Great Recession, “preempted States from regulating sports bets that occur within their jurisdictions if those bets are offered on markets registered with the Commodity Futures Trading Commission”. In plain English: New Jersey is arguing that federal derivatives registration does not erase state authority over sports betting.
3. Prediction markets say their event contracts are financial derivatives regulated by the CFTC. States say those contracts are just sports bets with a different label. That is the core jurisdiction fight, and it is exactly the kind of dispute that determines whether an operator needs one federal framework or a state-by-state compliance stack.
4. The Supreme Court is not obliged to take the case, but a separate 28 August ruling from the Ninth Circuit improved New Jersey’s odds. A three-judge panel there ruled unanimously for Nevada, creating a circuit split, which is often what gets the justices interested.
5. There is also a familiar historical hook here: five Supreme Court justices from the 2018 PASPA case are still on the bench, and New Jersey needs four justices to agree to hear the prediction market case. Davenport said the state is asking the Court to “resolve this issue and recognize that Congress did not silently make the sports-betting industry immune from state law.”

The backdrop matters. In the PASPA fight, New Jersey lost repeatedly until it won the one case that changed the market. This time, Kalshi has won so far in state court and at the Third Circuit, while its spokesperson Dani Lever says the platform is “an open, nationwide, financial exchange” that “cannot be regulated by 50 different regulators”. That is the sentence every PSP, acquirer, and partner bank will read as: the commercial model depends on whether the Supreme Court blesses a national path or leaves states in the game.