Gaming State Legislators Press Supreme Court to Hear Kalshi Prediction Markets Dispute
Should the Supreme Court agree to hear the dispute involving New Jersey regulators and a prediction markets platform, it may establish clear boundaries between state and federal authority over sports wagering.
US state legislators representing gaming jurisdictions have submitted an amicus brief to the nation's highest court, requesting that the justices examine a legal dispute involving prediction markets operator Kalshi and gambling regulators.
The National Council of Legislators from Gaming States (NCLGS) submitted its filing to the US Supreme Court on Tuesday, backing the petition for a writ of certiorari brought by New Jersey's Attorney General alongside the state's gaming regulatory authorities. The original petition, submitted on Sept. 2, requested that the Supreme Court review New Jersey's legal challenge against Kalshi, which could ultimately determine whether federal agencies or state regulators hold authority over prediction market platforms.
Through its amicus curiae brief in support of New Jersey's legal position, the NCLGS contended that a decision in Kalshi's favor would make states "powerless" when it comes to overseeing sports betting operations on prediction market platforms, leading to "substantial harm and confusion." The organization maintained that "gaming-related matters" ought to remain under the purview of state authorities across the United States, although the brief did not acknowledge the opposing viewpoint that event contracts on federally regulated markets belong exclusively under CFTC jurisdiction.
If Kalshi's self-described 'sports betting' activities are deemed beyond state regulation, then casinos, pari-mutuel operators, and other heavily regulated entities are certain to amend their business and products to seek the same status. Entire state regulatory regimes surrounding this vice activity will have to be reconsidered in light of any preemption found in this area.
New Jersey authorities filed the Supreme Court petition as part of their appeal process after a ruling from the US Court of Appeals for the Third Circuit, and Kalshi has yet to submit an official response. The prediction markets company must file a brief presenting its position in the matter by Nov. 9, though a company spokesperson informed Cointelegraph following the original petition that the platform could not be "regulated by 50 different regulators."