New Jersey Petitions Supreme Court Over Prediction Market Oversight

The Government of New Jersey has petitioned the Supreme Court of the United States to determine whether state or federal authorities hold oversight of prediction markets. The petition seeks to overturn a 3rd U.S. Circuit Court of Appeals ruling that classified event contracts as federally regulated derivatives under the jurisdiction of the Commodity Futures Trading Commission (CFTC).

New Jersey Attorney General Jennifer Davenport argues that these platforms are offering sports betting and must comply with state gambling laws. This legal challenge follows a conflicting ruling from the 9th U.S. Circuit Court of Appeals, which rejected an appeal by Kalshi and Crypto.com against the Nevada Gaming Control Board, finding that sports-related event contracts are not swaps regulated by the CFTC.

While the CFTC and platforms like Kalshi maintain they operate as federally regulated financial exchanges, 44 state attorneys general assert these activities constitute sports betting. The Supreme Court's decision will determine if prediction markets are immune from state-level gambling regulations.