IAGR and NAGRA File Amicus Brief Seeking Supreme Court Review in Flaherty v. KalshiEX

Two leading gaming regulator associations have filed a joint amicus brief urging the U.S. Supreme Court to review Flaherty v. KalshiEX, LLC. The filing addresses whether the Commodity Exchange Act preempts state gambling laws when sports wagers appear as event contracts on exchanges registered with the Commodity Futures Trading Commission.

As reported by G3 Newswire, the International Association of Gaming Regulators (IAGR) and the North American Gaming Regulators Association (NAGRA) worked with International Masters of Gaming Law (IMGL) counsel to prepare the brief. It seeks to resolve conflicting appellate court interpretations on the reach of federal commodities law into state-regulated sports wagering.

Conflicting Circuit Decisions

The Third Circuit concluded that federal law likely preempts New Jersey sports-wagering laws in preliminary-injunction proceedings. The Ninth Circuit reached the opposite conclusion concerning Nevada laws. These splits emerged after the Supreme Court’s 2018 decision in Murphy v. NCAA invalidated the Professional and Amateur Sports Protection Act, which had barred most state authorization of sports wagering.

The brief notes that legislatures set the boundaries of lawful gambling, including outright prohibition in some jurisdictions. Regulators then approve events and wager types, enforce minimum-age requirements, administer self-exclusion programs, apply prohibited-participant rules, maintain access to records, and monitor for suspicious betting patterns.

Risks to Consumers, Integrity, and Tribal Authority

“IAGR is concerned that sports wagering offered through prediction markets leaves consumers without the protection gaming regulators provide pursuant to public policy established in their jurisdiction,” said Ben Haden, President of IAGR. “Our brief challenges the claim that offering a sports wager as an event contract exempts it from state gambling laws. Without the protection and oversight provided by gaming regulators, we are highlighting the risks of underage players being able to access gambling freely, problem gamblers being left without proven harm-prevention tools — or worse, being targeted by operators — and the integrity of sport being put at risk. Regulators need clarity about their authority to enforce proven safeguards and the limits their jurisdictions have placed on gambling. That is why IAGR is supporting this request for Supreme Court review.”

“Our members are honored to be representing NAGRA and IAGR in this matter in the hopes of clearing up the significant uncertainty created by the conflicting federal court decisions which is upending more than a century of established state regulatory authority over gambling within state and tribal borders,” added Marc Dunbar, the current President of the International Masters of Gaming Law who is serving as counsel of record to the Associations.

The brief underscores the immediate practical consequences for ongoing supervisory and enforcement decisions while the circuit split persists. It recognizes that jurisdictions have made differing policy choices about gambling but argues for clear federal boundaries.

Reporting: G3 Newswire

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