US state lawmakers have filed an amicus brief with the US Supreme Court urging justices to accept New Jersey's appeal against prediction-market platform Kalshi, a decision that could resolve the long-running question of whether states or federal regulators hold authority over sports-betting-style contracts.
The National Council of Legislators from Gaming States (NCLGS) filed its curiae brief on Tuesday in support of New Jersey's petition for a writ of certiorari, which was originally submitted on September 2. The petition asks the nation's highest court to determine whether state gaming commissions or the Commodity Futures Trading Commission (CFTC) can regulate entities trading event-based contracts.
In its filing, the NCLGS argued that a ruling favoring Kalshi would leave states "powerless" to police sports betting conducted through prediction markets, creating "substantial harm and confusion" across jurisdictions. The group contended that "gaming-related matters" should remain under individual state authority, while acknowledging only in passing the counterargument that event contracts traded on federally supervised markets fall within the CFTC's exclusive purview.
"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 filing warned. "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 follows a Third Circuit Court of Appeals decision that went against New Jersey's position. As of now, Kalshi has not filed an official response. The company has until November 9 to submit a brief stating its stance. A Kalshi spokesperson previously told Cointelegraph the firm could not be "regulated by 50 different regulators."
