The American Gaming Association has filed a brief urging the Supreme Court to review a ruling that bars New Jersey from applying its gambling laws to sports contracts offered by prediction market Kalshi. The state is seeking clarity on whether federal registration with the Commodity Futures Trading Commission shields prediction markets from state-level sports betting regulation.
The dispute stems from a Third Circuit decision that sided with Kalshi and blocked New Jersey from enforcing its gambling statutes against the platform's sports contracts. AGA argues these contracts function as sports bets but operate without consumer protections, tax obligations or licensing requirements that apply to legal sportsbooks. That creates an uneven playing field for prediction markets bypassing state and tribal rules.
New Jersey has drawn support from 39 state attorneys general — a bipartisan coalition led by Ohio AG Andy Wilson — who argue gambling regulation has traditionally been a state matter. The NFL filed a separate brief citing integrity risks and the absence of controls comparable to licensed operators.
The Court has not yet decided whether to hear the case. If it does, a ruling is expected in 2027. Until then, the Third Circuit precedent stands. The outcome will determine whether prediction markets must comply with state gambling laws or remain under the CFTC umbrella. Kalshi is facing parallel litigation in Nevada and other jurisdictions.
