New Jersey asks Supreme Court to decide prediction-market sports betting rules

New Jersey Attorney General Jennifer Davenport filed a 332-page petition asking the U.S. Supreme Court to review sports betting regulation on prediction markets. The petition asks the court to review a Third Circuit decision in Kalshi's favor. The dispute began after New Jersey sent Kalshi a cease-and-desist letter alleging violations of state gambling laws. Kalshi later sued New Jersey. The Supreme Court must decide whether to grant the petition and hear the case. Davenport said states should be able to enforce gambling laws addressing compulsive gambling, minors and insider trading on sports games. Davenport said Congress did not make sports betting immune from state law. Kalshi said it is a nationwide financial exchange and cannot be regulated by 50 different regulators. States have argued that sports contracts on prediction markets can amount to gambling under state laws. The Commodity Futures Trading Commission has argued that it has exclusive jurisdiction over the markets under the Commodity Exchange Act. The CFTC has sued several states and proposed a prediction-market regulatory framework under Chair Michael Selig. An appeals court recently ruled that Kalshi failed to show that the CFTC preempts Nevada's authority to regulate sports betting. The CFTC did not immediately respond to a request for comment.