New Jersey asks Supreme Court to take up Kalshi sports contracts fight
New Jersey petitioned the US Supreme Court on Wednesday to hear its dispute with Kalshi over whether the prediction market's sports event contracts constitute wagering or derivatives trading. The state is seeking to overturn a lower court's April decision. New Jersey argues that a split between the Third and Ninth Circuits requires the justices to decide whether Kalshi's sports event contracts are shielded by federal preemption. The filing comes as Kalshi and competing platforms expand sports-related event contracts. If accepted, the case would address who has the power to regulate platforms like Kalshi and Polymarket U.S.
A Supreme Court grant would create a single federal answer on whether CFTC registration preempts state gambling laws for sports-linked event contracts. Kalshi now faces parallel exposure: New Jersey's petition joins Nevada's Ninth Circuit win, meaning two federal jurisdictions treat its contracts as gambling. Polymarket shares that exposure because any ultimate ruling reaches all CFTC-registered sports platforms.
Traders hold positions whose legality shifts with geography until the Court rules. Each state attorney general win before a grant emboldens the next filing. Kalshi's legal spend compounds while its national sports market fragments. The Third Circuit split makes grant likelier, but the timeline stretches across months of uncertainty.