New Jersey Casinos Ask CFTC to Block Sports Prediction Market Contracts

The Casino Association of New Jersey is pressing the US Commodity Futures Trading Commission (CFTC) to stop prediction market platforms from offering sports-related contracts that could clash with state gambling laws. For PSPs and acquiring teams, the issue is simple enough: if these products sit in the gray zone between commodities trading and gambling, the legal perimeter is still being argued in real time.

1. On Monday, July, 27, the Casino Association of New Jersey filed comments with the CFTC asking the agency to stop companies like Kalshi and Polymarket from enabling users to place event-based contracts tied to sporting events that could conflict with state gambling rules.
2. The association is also pushing to keep these platforms from offering such bets in US states where sports betting is not yet legal. That matters because the industry’s complaint is not just about competition; it is about prediction markets reaching into jurisdictions where regulated sportsbooks do not have a license to operate.
3. Prediction markets let users trade contracts based on the outcome of future events, and they have expanded rapidly across the United States. The catch is that they operate under federal commodities regulations, not the state-by-state sportsbook framework, which is exactly why the legal fight keeps coming back.
4. New Jersey has already tried to block Kalshi from operating in the state, but a federal court ruling stopped the state from enforcing that ban. So, on paper the state has objected; in practice, the platform has remained in play while the legal question is sorted out.
5. The dispute sits inside a bigger market shift: New Jersey played a major role in expanding legal sports betting after its 2018 Supreme Court victory overturned a federal restriction and let individual states decide whether to legalize wagering on sports. Since then, no less than 39 states and Washington, D.C. have made sports betting legal, including New York, New Jersey, and Pennsylvania.

For high-risk payments operators, the useful takeaway is that sports-adjacent products keep moving between regulatory boxes. If a platform’s product set can be framed either as federally regulated contracts or state-level gambling, the acquiring, risk, and compliance questions do not go away just because the UX looks familiar.