New Jersey Asks Supreme Court to Review Kalshi Sports Betting Ruling

New Jersey officials have taken their legal fight with Kalshi to the U.S. Supreme Court, asking the justices to decide whether federal commodities law prevents states from regulating sports bets offered on federally registered exchanges. The state’s petition was docketed on 8 septembre 2026, according to the Court’s public docket, which lists the case as No. 26-299.

The case is captioned Mary Jo Flaherty, Interim Director of the New Jersey Division of Gaming Enforcement, et al. v. KalshiEX, LLC. Flaherty and New Jersey Attorney General Jennifer Davenport are the petitioners, each in her official capacity. Solicitor General Jeremy M. Feigenbaum is counsel of record.

The petition for a writ of certiorari presents a single question: whether the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act preempted states from regulating sports bets that occur within their jurisdictions when those bets are offered on markets registered with the Commodity Futures Trading Commission (CFTC).

New Jersey filed the petition on 2 septembre 2026. The docket shows Justice Alito twice granted the state more time to file: a 1 juillet 2026 order extending the deadline to August 4, and a 24 juillet 2026 order extending it to September 3.

The New Jersey Case

The dispute began in 2025, when the Division of Gaming Enforcement sent Kalshi a cease-and-desist letter asserting that its sports event contracts violated the Sports Wagering Act, which permits only licensed entities to offer sports wagering to New Jersey patrons. Kalshi sued in mars 2025 to block enforcement, arguing that the Commodity Exchange Act, as amended by Dodd-Frank, preempts state sports-wagering laws because its contracts trade on a CFTC-registered exchange.

The U.S. District Court for the District of New Jersey granted Kalshi a preliminary injunction on 28 avril 2025, holding that the Act likely preempts the state’s sports-wagering laws. A divided Third Circuit panel affirmed on 6 avril 2026, ruling 2-1 that Kalshi’s sports bets are swaps under the Act’s exclusive-jurisdiction provision and that the Act preempts New Jersey’s laws as applied to bets placed on CFTC-registered markets. Judge Roth dissented, reasoning that New Jersey’s sports-wagering laws are not preempted and that Kalshi could comply with both state and federal law.

The Ninth Circuit’s Conflicting Decision

On 28 août 2026, a Ninth Circuit panel reached the opposite conclusion in Kalshi’s parallel dispute with Nevada. In an opinion by Judge Ryan Nelson, joined by Judge Bridget Bade with Judge Kenneth Lee concurring, the panel affirmed the dissolution of a preliminary injunction that had stopped the Nevada Gaming Control Board from enforcing state gaming laws against Kalshi’s sports event contracts, and remanded the case for consideration of Kalshi’s election contracts.

The panel held that Kalshi had not shown a likelihood that the Commodity Exchange Act preempts Nevada’s gaming regulations, because its sports event contracts are likely not swaps under the statutory definition. The opinion also held that a CFTC regulation prohibits registered exchanges from listing contracts that involve, relate to, or reference gaming, and that Kalshi’s self-certification and listing of its sports event contracts was unlawful under that rule.

The opinion records that Kalshi self-certified and began offering sports event contracts in janvier 2025, that the Nevada Gaming Control Board sent its cease-and-desist letter in mars 2025, and that more than 90% of Kalshi’s trades in 2025, representing 95% of its revenue, were sports related. The panel wrote that Kalshi’s sports event contracts are “sports bets under a reasonable person’s understanding.”

The Ninth Circuit expressly disagreed with the Third Circuit’s decision in the New Jersey case. New Jersey’s petition states that the Ninth Circuit mentioned the Third Circuit’s opinion more than 20 times while disputing its conclusion, interpretation, and methodology.

New Jersey’s Grounds for Review

The petition describes “a direct, acknowledged, and irreconcilable split” between the Third and Ninth Circuits on what New Jersey calls a pure legal question. It states that prediction-market litigation has produced at least 39 lawsuits across 20 states, and that lower federal and state courts have issued more than 20 decisions divided by an 18-4 ratio, with most rejecting the Third Circuit’s approach. The petition also notes that the Sixth Circuit, in an 24 avril 2026 order denying Kalshi a stay pending appeal in an Ohio case, observed that courts across the country are divided on the issue. Kalshi’s position, the petition states, has drawn opposition from 44 states, hundreds of tribes, casinos, and public officials.

The petition cites American Gaming Association figures reporting that sports wagering generated $16.89 billion in revenue for states nationwide in 2025, not counting sportsbooks in tribal casinos, and that 11 states prohibit sports betting while 39 permit some form of it. It also cites a report that Kalshi processed more than $17 billion in trading volume during the first two weeks of the 2026 FIFA World Cup, with fees topping $10 million per day.

On the merits, New Jersey argues the Third Circuit erred twice: first by holding that sports bets are swaps under the statute’s text, context, and structure, and again by holding that the Act would preempt state sports-gambling laws even if they were. The petition recounts that Congress passed the Commodity Exchange Act in 1936, created the CFTC in 1974 with exclusive jurisdiction over certain transactions, and added swaps to that jurisdiction through the 2010 Dodd-Frank Act alongside a special rule allowing the CFTC to bar event contracts involving gaming.

The petition also points to the Supreme Court’s 2018 decision in Murphy v. NCAA, which struck down the Professional and Amateur Sports Protection Act, the federal law that had prevented most states from authorizing sports wagering, and left each state free to act on its own. New Jersey enacted its Sports Wagering Act shortly after that ruling.

Kalshi’s response to the petition is due 8 octobre 2026, according to the Court’s docket.