New Jersey asks Supreme Court to settle prediction market dispute
The state is seeking a definitive ruling on whether sports prediction contracts fall under state gambling laws or federal oversight by the CFTC.
US.- New Jersey has petitioned the US Supreme Court to resolve conflicting court decisions over who should regulate prediction markets. The move would take the dispute to the nation’s highest court for the first time. If the justices agree to hear the case, a ruling could come in 2027 and have significant consequences for the gambling and prediction market sectors.
The state is challenging an appellate court decision that classified prediction contracts as financial instruments regulated by the CFTC, preventing New Jersey gaming authorities from blocking Kalshi’s sports-related contracts. The court ruled that the contracts qualify as swaps traded on a CFTC-regulated exchange, placing them under federal rather than state oversight.
However, the state maintains that the Commodity Exchange Act does not allow prediction platforms to disregard state gambling laws, and argues that sports contracts are the same as sports bets. “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,” New Jersey Attorney General Jennifer Davenport said.
It remains uncertain whether the Supreme Court will accept New Jersey’s case. Proceedings could begin this fall if it grants the petition. .
