NCLGS Amicus Brief Presses Supreme Court to Safeguard State Oversight of Sports Event Contracts
NCLGS filed an amicus brief backing New Jersey AG Jennifer Davenport’s Supreme Court petition against Kalshi over sports event contracts. It argues for state control to prevent substantial harm and confusion while warning of tax revenue losses from potential industry restructuring. SCOTUS will clarify state authority versus CFTC preemption.
SCCG Take — States seek to preserve gaming oversight and tax bases, but a federal preemption win for Kalshi would force operators to reassess compliance and business models across prediction markets.
The National Council of Legislators from Gaming States (NCLGS) has filed an amicus brief urging the US Supreme Court to intervene in the legal battle over prediction markets, as reported by GamblingNews. The filing supports New Jersey Attorney General Jennifer Davenport‘s petition for a writ of certiorari against Kalshi.
This move signals that the time for inaction has passed. The NCLGS is pushing for resolution on whether state gaming laws or federal commodity rules govern event contracts on sports.
NCLGS Position on State Authority
The amicus brief does not directly tackle the question of Commodity Futures Trading Commission (CFTC) jurisdiction. Instead it contends that state authorities should control gaming-related matters amid the uncertainty surrounding prediction markets.
The document specifically argues against a Supreme Court decision that would bar states from intervening in sports event contracts. Such a ruling would produce “substantial harm and confusion.” The brief concedes that contracts on federally regulated exchanges fall under CFTC oversight but questions whether sports event contracts qualify.
This position aligns with arguments from gaming regulators and attorneys general who classify these products as gambling. The petition stems from an appeal of a ruling by the US Court of Appeals for the Third Circuit.
Risks of a Kalshi-Favorable Ruling
The NCLGS brief warns of the knock-on effects should the Court rule in Kalshi’s favor. Casinos and pari-mutuel businesses could restructure to obtain equivalent legal treatment. The result may be a decline in federal and state tax revenue.
The matter now rests with the Supreme Court. Its decision will depend on how the justices treat the relationship between state gaming regulators and federal preemption. Whatever the outcome, it will carry wider impact on the debate surrounding prediction markets and sports event contracts.
Reporting: GamblingNews
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