New Jersey’s Attorney General and the state’s interim director for the Division of Gaming Enforcement have officially petitioned the US Supreme Court to hear a case aimed at resolving whether state authorities or federal agencies have jurisdiction over prediction market companies.
On Wednesday, Attorney General Jennifer Davenport and gaming enforcement interim director Mary Jo Flaherty filed a petition for a writ of certiorari to the US Supreme Court over New Jersey’s enforcement against prediction market platform Kalshi over sporting event contracts. Officials cited civil cases brought by gaming authorities in “at least 20 states,” seeking the highest court in the US to decide whether prediction market companies could be in compliance with the Commodity Futures Trading Commission (CFTC) while violating state laws.
“Companies like Kalshi claim to offer legal sports betting in all 50 States, but they refuse to follow the gambling laws of any State,” said Davenport. “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. We’re calling on the Supreme Court to resolve this issue and recognize that Congress did not silently make the sports-betting industry immune from state law.”
The petition challenges an April opinion from the US Court of Appeals for the Third Circuit, in which judges ruled 2-1 against New Jersey’s gaming authorities, saying Kalshi had a “reasonable chance of success” in claiming that the CFTC’s Commodity Exchange Act preempted state law. It specifically challenges the claim that sports bets on prediction market platforms amount to “swaps” under the CFTC’s purview and argues that “federal law does not preempt state sports-gambling laws regardless.”
Kalshi spokesperson Dani Lever told Cointelegraph that the company disagreed with New Jersey’s decision to appeal to the Supreme Court, saying that it could not be “regulated by 50 different regulators.”
“We remain confident in the lower courts’ rulings, and nothing in New Jersey’s filing today changes our view,” said Lever.