New Jersey Petition Seeks Supreme Court Ruling on State Power to Regulate CFTC-Registered Sports Event Contracts

New Jersey has asked the U.S. Supreme Court to settle whether the 2010 Dodd-Frank Act bars states from enforcing their gambling laws against sports betting offered on prediction markets registered with the Commodity Futures Trading Commission.

New Jersey Attorney General Jennifer Davenport filed the petition for writ of certiorari shortly after the Ninth Circuit Court of Appeals ruled against prediction markets. That decision directly conflicts with an April ruling from the Third Circuit that permitted Kalshi and similar platforms to offer sports event contracts in the state. The petition frames the dispute around one word in Dodd-Frank: “swap.”

Davenport stated: “Companies like Kalshi claim to offer legal sports betting in all 50 States, but they refuse to follow the gambling laws of any State. We’re calling on the Supreme Court to resolve this issue and recognize that Congress did not silently make the sports-betting industry immune from state law.”

Origins of the Circuit Split

The conflict traces to January 2025, when Kalshi began offering sports wagering. In March 2025 the New Jersey Division of Gaming Enforcement sent cease-and-desist letters to Kalshi and Robinhood, directing them to stop sports wagering and void existing bets. Kalshi sued and obtained a temporary injunction.

The Third Circuit upheld the injunction. Its majority opinion held that “Because Kalshi’s sports-related event contracts are traded on a CFTC-licensed DCM and depend on event outcomes associated with economic consequences, they fit within the Act’s definition of ‘swaps’ subject to the CFTC’s jurisdiction.”

Last week’s Ninth Circuit decision rejected that interpretation. It concluded that “these sports event contracts are likely not swaps under the CEA” because Congress addressed gambling in separate statutes and did not impliedly repeal them through Dodd-Frank. The Ninth Circuit warned that the broader reading would assume Congress “hid an elephant in a mousehole” by federalizing gaming nationwide.

What the Supreme Court Must Resolve

According to reporting by SBC Americas, the petition narrows the precise question the justices would answer: whether Dodd-Frank preempted states from regulating sports bets that occur within their jurisdictions if those bets are offered on markets registered with the CFTC. Gaming law expert John Holden of the Kelley School of Business at Indiana University explained that an opposition brief from Kalshi is due within 30 days, followed by a 10-day reply window for New Jersey and a conference within roughly one month thereafter.

The justices could grant certiorari, deny it, extend consideration, or request input from the U.S. Solicitor General, a step that could add months. Until the Supreme Court acts, the existing circuit split leaves operators and regulators without uniform national guidance on where state authority ends and federal commodity registration begins. The limitation of this petition is its narrow focus on sports betting; broader prediction market activities remain outside its direct scope.

Reporting: SBC Americas

Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.