New Jersey asks Supreme Court to review Kalshi case, bringing prediction markets closer to a major legal showdown over state gambling laws

New Jersey petitioned the Supreme Court to decide whether the Dodd-Frank Act preempts state gambling regulations for products offered on federally regulated designated contract markets. A circuit split now exists after a Ninth Circuit ruling last month, which lawyers say gives the issue momentum; New Jersey could already appeal April's Third Circuit ruling, according to Katten partner Carl Kennedy. If justices deem sports prediction markets gambling, operators would need state licenses and pay state taxes; if they are CFTC-regulated swaps, states and pure-play sports betting firms face significant implications. The author notes lawyers expect SCOTUS to take a prediction market case within a year, though acceptance is uncertain.

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