New Jersey asked the U.S. Supreme Court on Wednesday to decide whether states can still regulate sports betting when those bets are offered on a federally registered exchange. Attorney General Jennifer Davenport and Division of Gaming Enforcement interim director Mary Jo Flaherty filed a 332-page petition for a writ of certiorari. It is the first petition to reach the justices over the legality of Kalshi‘s sports contracts.

The question presented asks whether the 2010 Dodd-Frank Act preempted states from regulating sports bets placed inside their borders when those bets trade on markets registered with the Commodity Futures Trading Commission. Davenport said in a statement that “Congress did not silently make the sports-betting industry immune from state law,” and that states have long written gambling rules to address compulsive betting, minors and insider trading on games. Kalshi self-certified its sports contracts with the CFTC, notifying the agency they complied with federal law rather than seeking approval first.

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The answer determines whether sports betting is a 50-state licensing business or a single federal derivatives business. A win for Kalshi would let one CFTC registration override every state gaming statute, collapsing the cost of nationwide distribution. A win for New Jersey would push Kalshi and its rivals back inside state licensing, tax and compliance regimes wherever they want to take a wager. Litigation has already spread to at least 20 states, with dozens of suits pending and several state gambling laws currently enjoined by federal courts.

Two appeals courts have now answered the question differently. The Third Circuit ruled 2-1 in April that Kalshi’s products fell under the Commodity Exchange Act, which preempted New Jersey’s gambling laws. On Friday the Ninth Circuit found the CEA likely does not preempt Nevada’s rules and denied Kalshi and Crypto.com injunctive relief against the Nevada Gaming Control Board, months after a Nevada judge extended a ban.

Meanwhile, the CFTC has sued at least nine states over event contract restrictions, and it ordered Kalshi not to comply with a Michigan court demand to void executed trades.

AI-assisted content: This article was produced with the assistance of AI tools and was reviewed, edited, and fact-checked by a member of the Unchained editorial team before publication.

New Jersey Petitions the Supreme Court to Decide Whether States Can Regulate Sports Event Contracts

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