New Jersey Asks US Supreme Court to Rule on Sports Contracts

At long last, the US Supreme Court (SCOTUS) will finally have an opportunity to decide whether sports prediction markets are a form of gambling.

New Jersey Attorney General Jennifer Davenport officially filed a Petition for Writ of Certiorari asking the nation’s highest court to hear an appeal of its lawsuit against Kalshi. The state lost in the U.S. Court of Appeals for the Third Circuit, but a conflicting ruling in another Kalshi case from the Ninth Circuit allows Davenport and New Jersey to ask SCOTUS to intervene. 

The fight between Kalshi and New Jersey centers around the legal status of sports contracts. While the industry and Commodity Futures Trading Commission argue the offering is protected under the Commodity Exchange Act, many states argue it is a clear form of gambling.

“Kalshi markets itself as the ‘first app for legal sports betting in all 50 States,’ including for wagering on NCAA games held in New Jersey and participated in by New Jersey teams, which is impermissible under New Jersey’s Constitution. But Kalshi does not abide in any way with our State’s gaming laws,” Division of Gaming Enforcement Interim Director Mary Jo Flaherty shared in a press release. “This is a states’ rights issue. In New Jersey, gaming is prohibited by its Constitution, other than for exceptions approved by New Jersey voters. In this case, the State is upholding the will of New Jerseyans regarding the manner in which gaming can be conducted.”

SCOTUS will now review the request and decide whether it wishes to take up the case.

A Long Time Coming

We have known the fight over sports prediction markets would likely end up at SCOTUS’s doorstep, but it didn’t happen overnight.

Dozens of states have pushed back against sports contracts over the last year. It has led to many lawsuits, which have delivered mixed rulings across the US. Some states have successfully forced Kalshi and other operators to halt sports markets, but platforms remain available in some form in all 50 states. 

If SCOTUS takes up New Jersey’s case, its ruling would set a precedent that would resolve most of the pending cases challenging the growing industry.