New Jersey Attorney General Petitions Supreme Court on Kalshi Sports Betting Legality

New Jersey Attorney General Jennifer Davenport has filed a petition with the US Supreme Court seeking review of whether prediction markets such as Kalshi may offer sports wagers without complying with state gambling laws. This action is the first certiorari petition on the issue. Litigation has erupted across at least 20 states, with dozens of active suits and several state gambling laws enjoined by federal courts.

“Companies like Kalshi claim to offer legal sports betting in all 50 States, but they refuse to follow the gambling laws of any State,” said Attorney General Davenport. “These companies have no right to offer their sports bets without following state law, which is why dozens of States across the ideological spectrum have opposed them. States have long adopted careful laws to regulate gambling, including to prevent compulsive gambling, gambling by minors, and insider trading on sports games. 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.”

“Kalshi markets itself as the ‘first app for legal sports betting in all 50 States,’ including for wagering on NCAA games held in New Jersey and participated in by New Jersey teams, which is impermissible under New Jersey’s Constitution. But Kalshi does not abide in any way with our State’s gaming laws,” said Division of Gaming Enforcement Interim Director Mary Jo Flaherty. “This is a states’ rights issue. In New Jersey, gaming is prohibited by its Constitution, other than for exceptions approved by New Jersey voters. In this case, the State is upholding the will of New Jerseyans regarding the manner in which gaming can be conducted.”

Conflicting Federal Appeals Court Rulings

In April 2026 the Third Circuit ruled 2-1 that New Jersey’s state gambling laws are preempted, allowing Kalshi to treat sports bets as CFTC-regulated swaps. The Ninth Circuit disagreed on August 28, holding that sports bets on sporting event outcomes do not fall within the CFTC’s exclusive jurisdiction. The Ninth Circuit stated that Congress did not take a wrecking ball to all sports gambling regulations built up over decades by federal, state, and tribal governments in a 2010 Wall Street reform bill. New Jersey co-led an amicus brief joined by 39 other jurisdictions that the Ninth Circuit cited.

Ramifications if Kalshi Prevails

Sports betting generated $16.89 billion in revenue for states nationwide in 2025, not including sportsbooks in tribal casinos. 95% of Kalshi’s revenue in 2025 came from sports betting. A ruling for Kalshi would mean that all sports gambling off CFTC-registered markets would seemingly become illegal even where state law permits it. This would disrupt brick-and-mortar casinos in Atlantic City, Las Vegas, or on tribal lands. The petition notes that states’ gambling laws protect minors, mitigate problem gambling, prevent insider trading, and ensure operator financial stability. The filing references the Supreme Court’s decision eight years ago in Murphy v. NCAA that each state is free to act on its own if Congress does not regulate sports gambling directly. As first reported by G3 Newswire, 44 states, hundreds of tribes, and casinos have opposed Kalshi’s approach.

The Supreme Court’s choice on whether to grant review will determine if the Dodd-Frank Act displaced decades of state and tribal sports wagering rules. Operators and state regulators require clear lines on compliance obligations going forward.

Reporting: G3 Newswire

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