New Jersey petitions Supreme Court over Kalshi sports contract ruling

New Jersey has petitioned the U.S. Supreme Court to review a ruling involving Kalshi, a prediction market platform. The dispute centers on whether sports event contracts are classified as swaps under the federal Commodity Exchange Act or if they fall under state-level gambling regulations.

New Jersey argues that federal law does not preempt state sports-gambling laws and that these contracts do not constitute swaps. This legal challenge follows conflicting rulings in other jurisdictions; for instance, a federal judge in Illinois recently found similar contracts likely to be swaps, while a Ninth Circuit panel in Nevada rejected a broad reading of federal law that would have protected Kalshi from state regulation.

The broader U.S. gambling landscape remains highly fragmented following the 2018 Supreme Court decision to strike down the federal sports betting ban. While sports betting has become more widespread, online casino operations are limited to a handful of states, including Pennsylvania, Michigan, New Jersey, West Virginia, Connecticut, Delaware, Rhode Island, and Maine. The industry also faces complexity from the rise of sweepstakes casinos, which use virtual currencies to navigate real-money gambling restrictions.