A 332-page cert petition from New Jersey's attorney general asks the justices to resolve conflicting appellate rulings on whether states can treat prediction platforms as gambling, a decision that would determine Kalshi and Polymarket's access to the US market.
New Jersey's top prosecutor asked the US Supreme Court on Wednesday to settle who regulates prediction markets, a first-time test that could let the state bar Kalshi and Polymarket after a federal appeals court blocked its enforcement bid. Attorney General Jennifer Davenport filed a 332-page writ of certiorari seeking review of a Third Circuit ruling that the Commodity Futures Trading Commission's exclusive jurisdiction preempts state gambling law.
"States have long adopted careful laws to regulate gambling, including to prevent compulsive gambling, gambling by minors, and insider trading on sports games," Davenport, a Democrat, said in a statement. "We're calling on the Supreme Court to resolve this issue and recognize that Congress did not silently make the sports-betting industry immune from state law."
The petition lands less than a week after the Ninth Circuit, in a unanimous decision, let Nevada regulate Kalshi as a sports-betting platform — directly conflicting with the Third Circuit's April ruling in New Jersey's favor. The split gives the justices a reason to grant review. Kalshi, which controls an estimated 90 percent of the US prediction market, disputes the reading. "Kalshi is an open, nationwide financial exchange. It cannot be regulated by 50 different regulators," spokeswoman Dani Lever said. "Both the Third Circuit and the District of New Jersey sided with Kalshi because the CFTC's exclusive jurisdiction preempts state law."
The stakes extend beyond New Jersey. Roughly 20 states are fighting prediction platforms in court, and the CFTC under chair Michael Selig has sued nine of them to defend its turf, with President Trump backing the agency's exclusive authority on social media. Sports contracts and parlays account for about 80 percent of Kalshi's volume, and a CNN analysis found users aged 18 to 21 traded $5.4 billion on the platform this year, including $3.9 billion in sports and parlays — a cohort legally barred from licensed sportsbooks. Polymarket, the second-largest US platform, settles trades on crypto-native rails, tying the outcome to token and Web3 market dynamics.
The justices are likely to decide this fall whether to hear the case, with a ruling expected around next summer. A decision for New Jersey would force Kalshi and Polymarket to geo-fence or exit states that treat their event contracts as gambling, shrinking a market that does billions of dollars in weekly volume. A ruling for the platforms would cement federal oversight and hand the CFTC a clean national framework, removing the patchwork of state bans that has clouded the sector's growth since Davenport first moved to shut down Kalshi last year.
This article is for informational purposes only and does not constitute investment advice.
