New Jersey asks Supreme Court to decide if states or federal government can regulate prediction markets
New Jersey has requested that the Supreme Court resolve a legal dispute over whether state governments or the federal government have the authority to regulate prediction markets. The case centers on whether platforms like Kalshi, which allow users to bet on real-world events, are financial derivatives markets or gambling. While the Commodity Futures Trading Commission (CFTC) regulates these sites federally, a bipartisan coalition of 44 states argues that prediction markets are essentially unlicensed sportsbooks that should be subject to state gambling laws. New Jersey's petition follows a split in federal appeals courts: the 3rd Circuit ruled in favor of Kalshi, stating federal jurisdiction preempts state law, while the 9th Circuit ruled that states can regulate these markets as sports betting. The administration announced that it supports the growth of prediction markets, with CFTC chairman Mike Selig, a Trump appointee, championing the agency's exclusive jurisdiction. President Trump has stated that it is critically important to stop states from regulating these sites so they can flourish. The Supreme Court will likely consider the case later this fall, with a decision expected by next summer.
Sources
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Local media blasts SF Giants for unprecedented Kalshi ad
SFGATE
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First challenge to prediction markets reaches Supreme Court
CNN
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New Jersey asks Supreme Court to resolve fight over Kalshi's future
NPR