New Jersey Files Supreme Court Petition Against Kalshi Over Sports Prediction Markets

The legal battle between states and prediction markets is heading to the Supreme Court as New Jersey has filed a certiorari petition against prediction market platform Kalshi. This move could prove pivotal as state regulators push to regulate sport-related contracts on these prediction markets.

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New Jersey Files Certiorari Petition Against Kalshi

A court filing shows that the state has filed a certiorari petition against Kalshi to overturn the 3rd U.S. Circuit Court of Appeals decision, which held that the CFTC has exclusive jurisdiction over sports prediction markets. The state is asking whether the 2010 Dodd-Frank Act and Consumer Protection Act (CPA) preempted states from regulating sports bets that occur within their jurisdictions if those bets are offered on markets registered with the CFTC.

This comes as states continue to crack down on sports prediction markets, arguing that they operate as illegal sports betting platforms. The petition also follows a seperate 9th U.S. Circuit Court of Appeals ruling against these prediction market platforms, with the judges opining that sports contracts are sports bets.

As such, the Supreme Court’s decision would be pivotal, as two appellate courts have issued conflicting rulings: one favoring the states and the other supporting prediction markets like Kalshi. This could lay to bed whether or not the CFTC has exclusive jurisdiction over

These prediction markets continue to see their valuation rise as they enjoy mainstream adoption. Kalshi recently raised new capital at a $22 billion valuation, while Polymarket raised $1 billion at a valuation of nearly $21 billion.

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On Major-Questions Doctrine

Legal expert Daniel Wallach pointed out that New Jersey has invoked the major-questions doctrine with its reference to the Dodd-Frank Act. The state argues that finding that the Act impliedly displaces state sports-gambling laws is “an ‘astonishing’ conclusion that has grave ‘economic and political consequences.”

“That is especially so because this would represent a ‘significant change in the sensitive relation between federal and state’ jurisdiction in an area of ‘traditional state authority.’” pic.twitter.com/OILmgLaou3

— Daniel Wallach (@WALLACHLEGAL) September 2, 2026

New Jersey also argues that such a finding “would represent a ‘significant change in the sensitive relation between federal and state’ jurisdiction in an area of ‘traditional state authority.” The state also cited the 9th Circuit’s decision in its filing.

However, in a statement shared with FOS, Kalshi argued that the decision still agreed with the key principle that the CFTC’s exclusive jurisdiction preempts state law. The prediction market platform added that the court only differed based on a regulation that is in the process of being rewritten. “We remain confident in the lower courts’ rulings, and nothing in New Jersey’s filing today changes our view,” Kalshi said.

For more on prediction markets, check out Best Regulated Prediction Markets in the U.S.