New Jersey Calls on Supreme Court to Rule on Sports-Event Contracts
Jesse M. Cox Published 03/09/2026
It was New Jersey that went to the Supreme Court and successfully got PASPA struck down in May 2018, opening the door to widespread sports betting in the USA. Now, New Jersey is asking the Supreme Court to rule on the controversial prediction-market sports-event contract argument. The Garden State is calling upon the highest court in the land to hear a case on whether sports event contracts offered by Kalshi and other prediction market sites are legal under federal law.
The hope is to settle the issue once and for all. Are sports-event contracts legal under federal law, or can state gambling authorities overrule the CFTC?
New Jersey seeks to draw a sports-event contract finish line
As a controversial debate, it's right up there with Coke vs Pepsi, McDonald's vs Burger King, and less filling or tastes great. Are sports-event contracts derivative swaps governed by the federal Commodity Futures Trading Commission (CFTC)? Or are these sports-event contracts sports betting that should fall under the regulatory control of state gambling authorities?
New Jersey is asking the Supreme Court to deliver the final answer on this contentious issue.
“Companies like Kalshi claim to offer legal sports betting in all 50 States, but they refuse to follow the gambling laws of any State,” New Jersey Attorney General Jennifer Davenport said in a statement about the filing of the petition. “These companies have no right to offer their sports bets without following state law, which is why dozens of States across the ideological spectrum have opposed them.
"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."
One of the few prediction market court victories came in New Jersey
There have been a string of legal rulings against prediction market sites. However, it was in New Jersey that prediction market site Kalshi was able to celebrate a rare court victory over a state gambling regulator. Davenport sought to put a halt to Kalshi offering sports-event contracts in New Jersey. Kalshi sued the state.
A federal district judge blocked New Jersey from taking regulatory action against Kalshi. In April, the Philadelphia-based 3rd US Circuit Court of Appeals upheld that ruling in a 2-1 decision.
Three states - Nevada, Michigan, and Washington - have won court rulings forcing Kalshi to geofence its sports-event contracts in those states. New Jersey is among a bipartisan coalition of 44 states arguing that prediction market sports-event contract platforms are gambling. They believe that prediction market companies are partaking in illegal sports betting. In doing so, they are running afoul of state gaming regulations.
Kalshi is gearing up for another court fight
Kalshi officials were quick to denounce this latest court action from New Jersey.
“We disagree with New Jersey’s filing,” Dani Lever, a Kalshi spokeswoman, said in a statement. “Kalshi is an open, nationwide financial exchange. It cannot be regulated by 50 different regulators.
"Both the Third Circuit and the District of New Jersey sided with Kalshi because the CFTC’s exclusive jurisdiction preempts state law. We remain confident in the lower courts’ rulings, and nothing in New Jersey’s filing today changes our view.”
If the Supreme Court opts to hear the case, it will likely do so later this fall. That would likely lead to a decision being handed down sometime next summer.