New Jersey Asks US Supreme Court to Decide Whether States Can Police Kalshi-Style Sports Contracts

New Jersey has asked the US Supreme Court to step into the prediction-market fight and decide whether states can apply gambling laws to sports-related event contracts offered through platforms such as Kalshi. The answer matters for any PSP or operator watching where financial-contract language ends and sportsbook regulation begins.

1. New Jersey filed its appeal on Wednesday after the US Court of Appeals for the Third Circuit ruled in April that the US Commodity Futures Trading Commission has exclusive jurisdiction over Kalshi’s sports-related event contracts, Reuters reported. The state wants the Supreme Court to overturn that ruling and make clear that state gambling laws still apply.
2. The core issue is classification. Kalshi and similar platforms let customers trade contracts tied to future events, from elections to sporting contests. The companies treat those products as federally regulated financial contracts; state officials say sports-related contracts function as wagers and should therefore fall under state gaming rules.
3. New Jersey and other states say prediction-market operators are offering sports wagering without the licenses required under local law. Reuters reported that those rules can include consumer protections and age limits, including bans on betting by people younger than 21.
4. New Jersey Attorney General Jennifer Davenport said the platforms should not be able to avoid state requirements simply because the products are packaged as event contracts. She told Reuters that “dozens of states across the ideological spectrum” have opposed letting the companies offer sports bets without complying with state law.
5. The Supreme Court petition lands while federal appeals courts are splitting on the same question. The Third Circuit sided with Kalshi in April, but the Ninth Circuit last week took the other view in a Nevada case, saying Kalshi was unlikely to show that federal law stopped Nevada from requiring a gaming license for sports-related contracts. That split raises the odds of a national ruling, which is exactly what companies operating across states need when they do not want one jurisdiction treating the product as a futures contract and the next one treating it as a sportsbook.

Kalshi, based in New York, did not immediately respond to Reuters’ request for comment on New Jersey’s filing.