US Lawmakers From Gaming States Urge Supreme Court to Take Up Kalshi Case
Key Takeaways
- •State lawmakers organized as the NCLGS filed an amicus brief at the US Supreme Court on Tuesday urging the justices to hear New Jersey's case against prediction markets platform Kalshi.
- •The brief argues that a ruling favoring Kalshi would leave states powerless to regulate sports betting on prediction markets and could force casinos and other regulated operators to seek similar status, requiring state gaming regimes to be reconsidered.
- •The filing did not address the competing claim that event contracts traded on federally regulated markets fall under the Commodity Futures Trading Commission's exclusive jurisdiction, an issue that could determine whether such contracts operate nationwide under one federal framework or face state-by-state gaming rules.
- •New Jersey's petition for a writ of certiorari was filed on Sept. 2 as an appeal following a US Court of Appeals for the Third Circuit decision, and Kalshi has until Nov. 9 to file a brief stating its position.
- •Kalshi has not issued an official response to the petition, though a spokesperson previously said the company could not be regulated by 50 different regulators.
A group of US state lawmakers has filed an amicus brief with the US Supreme Court, urging justices to take up the legal dispute between prediction markets platform Kalshi and state gaming authorities.
On Tuesday, the National Council of Legislators from Gaming States (NCLGS) filed at the Supreme Court in support of the petition for a writ of certiorari submitted by New Jersey's Attorney General and gaming authorities. The petition, filed on Sept. 2, asks the nation's highest court to consider New Jersey's case against Kalshi, potentially resolving whether state authorities or federal agencies have jurisdiction over prediction market companies. The outcome could shape the regulatory landscape for sports event contracts across the US.
In its amicus curiae brief backing New Jersey's position, the NCLGS argued that a ruling favoring Kalshi would "[render] states powerless" to regulate sports betting on prediction markets, causing "substantial harm and confusion." According to the group, "gaming-related matters" should be left to individual US state authorities, though the filing did not address the competing argument that event contracts traded on federally regulated markets fall under the Commodity Futures Trading Commission's (CFTC) exclusive jurisdiction. How the justices weigh that exclusivity argument could determine whether event contracts can be offered nationwide under a single federal framework or must clear state-by-state gaming rules.
"If Kalshi's self-described 'sports betting' activities are deemed beyond state regulation, then casinos, pari-mutuel operators, and other heavily regulated entities are certain to amend their business and products to seek the same status," the state lawmakers wrote. "Entire state regulatory regimes surrounding this vice activity will have to be reconsidered in light of any preemption found in this area."
The Supreme Court petition was filed by New Jersey authorities as part of an appeal following a decision from the US Court of Appeals for the Third Circuit. Kalshi has not issued an official response to the petition. The company has until Nov. 9 to file a brief stating its position in the case, but a spokesperson told Cointelegraph after the initial filing that it could not be "regulated by 50 different regulators." Attention now turns to whether the justices agree to hear the case, a decision that would move the state-versus-federal jurisdictional dispute closer to a final resolution.
Related: Kalshi joins Coinbase with own filing for US stock perpetual futures
