IAGR and NAGRA ask the US Supreme Court to settle state regulation of Kalshi sports event contracts

The International Association of Gaming Regulators (IAGR) and the North American Gaming Regulators Association (NAGRA) have filed a joint amicus brief asking the US Supreme Court to decide whether the Commodity Exchange Act, as amended by Dodd-Frank, blocks states from regulating sports event contracts offered through federally registered exchanges. For high-risk operators, the issue is not abstract: the answer goes to who can enforce gambling rules, and where.

1. IAGR and NAGRA are backing New Jersey in its dispute with Kalshi and want the Supreme Court to review whether federal commodities law pre-empts state gambling laws when sports wagers are offered through a CFTC-registered exchange. In plain English: if the contracts sit on a federal exchange, does that keep state gambling regulators out, or not?
2. The associations point to a split in the federal appeals courts. The Third Circuit said Kalshi’s sports contracts were likely swaps under federal oversight. The Sixth and Ninth Circuits went the other way, saying Kalshi had not shown its contracts were swaps and that federal law did not stop New Jersey, Ohio or Tennessee from enforcing their gambling laws.
3. That split matters because the same Kalshi contracts can face different treatment depending on the state. IAGR and NAGRA say the uncertainty is already creating problems for regulators and licensed operators, even though the cases are still at an early stage.
4. The brief also brings in tribal gaming. Under the Indian Gaming Regulatory Act (IGRA), sports betting is Class III gaming on tribal lands and is generally governed through tribal-state compacts that set how regulation is shared between the two sovereign entities.
5. The associations say some states have reserved part or all of their sports betting markets to tribes. Maine limits eligibility for mobile sports wagering licences to federally recognised tribes, Michigan excludes internet sports betting conducted exclusively on Indian lands from its state framework, and Nevada has warned licensees that offering sports event contracts in a way that violates a tribal right established through a compact could lead to disciplinary action.

The brief also cites the Ninth Circuit’s September decision in the dispute of Blue Lake Rancheria against Kalshi, which pushed the issue beyond state gambling law. For PSPs and operators, the practical question is simple: if courts keep producing different answers, compliance teams will have to treat sports event contracts as a moving target by state, by venue, and possibly by tribal compact.