New Jersey authorities have asked the U.S. Supreme Court to decide whether states can regulate sports betting on prediction markets, challenging a lower court ruling that federal law and the CFTC have exclusive jurisdiction.
The case could determine whether states or federal regulators have authority over prediction markets, impacting the future of sports betting and online wagering.
New Jersey is urging the Supreme Court to intervene in a legal battle over prediction markets, arguing they should not be exempt from state gambling laws. Attorney General Jennifer Davenport stated that platforms like Kalshi operate nationwide without adhering to any state's gambling regulations, which she believes Congress did not intend. The state's petition seeks to overturn a prior appellate court decision that found federal law supersedes state regulations for these platforms, designating the Commodity Futures Trading Commission (CFTC) as the exclusive regulator. This legal challenge comes at a time when differing rulings from appellate courts have created a split, increasing the likelihood of the Supreme Court taking up the issue. Legal experts suggest that the conflicting decisions, including one that found Kalshi not immune from Nevada's gaming laws, make Supreme Court involvement highly probable. New Jersey's action is part of a broader effort to ensure states retain the authority to decide whether to permit sports wagering within their borders, a principle that Davenport argues is upended by the current operation of prediction markets. This is not New Jersey's first foray into high-stakes betting litigation; the state was a key party in the 2018 Supreme Court case that enabled states to legalize sports betting. Currently, 39 states offer some form of sports betting, while others prohibit it.