New Jersey Takes Prediction Markets Fight to the US Supreme Court After Split Court Rulings

New Jersey has asked the US Supreme Court to step into the dispute over who regulates prediction markets, after courts reached opposite conclusions on whether sports event contracts are financial instruments under CFTC oversight or gambling products subject to state law. For high-risk operators, this is not just legal theater: the answer goes to licensing, geo-blocking, product availability, and which regulator gets the final say.

1. New Jersey is seeking to overturn an appellate ruling that said prediction contracts are regulated financial instruments, specifically swaps traded on a CFTC-regulated exchange. Under that view, the state’s gambling regulator had no authority to block Kalshi from offering sports-related event contracts to users in New Jersey.
2. The state’s Attorney General’s Office argues that the Commodity Exchange Act does not let prediction platforms ignore state law. Jennifer Davenport, New Jersey Attorney General, said: “These companies have no right to offer their sports bets without following state law, which is why dozens of states across the ideological spectrum have opposed them.”
3. The court record is now split. In August, the 9th US Circuit Court of Appeals sided with Nevada and rejected Kalshi’s attempt to stop state gaming regulators from overseeing its sports contracts. That ruling let Nevada significantly restrict the platform’s offerings, despite pushback from the CFTC, which says it has sole authority over the sector.
4. This is the first time the dispute has reached the US Supreme Court. If the Court agrees to hear the case, proceedings could start this fall and a final verdict could be expected sometime in 2027, though the original text also says a ruling could be expected sometime next summer if the Court takes it up.
5. The political backdrop matters here because the Trump Administration is described as strongly favorable toward prediction markets. Trump Jr. has repeatedly called on states to stop trying to regulate the sector and leave the CFTC as the sole authority.

For PSPs, acquirers, and banking partners, the practical issue is simple: a federal win for prediction platforms would strengthen the case for nationwide product rollout under one regime, while a state-law win would keep the market fragmented by jurisdiction, with Nevada already shown willing to restrict offerings. That is the kind of split that changes onboarding rules fast.