New Jersey has petitioned the U.S. Supreme Court over regulatory jurisdiction for sports event contracts. The dispute concerns whether federal commodities law or state gambling rules govern those contracts. The petition follows differing rulings from the Third and Ninth Circuit appeals courts.
The petition asks whether federal commodities law or state gambling rules govern sports event contracts.
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Kalshi has written to the SEC asking it to hold off approving new binary options contracts from Cboe Global Markets until a public consultation concludes, according to a report by Valor. The contracts would be tied to corporate results metrics, a segment where Kalshi already offers event contracts under CFTC oversight. The request sharpens a jurisdiction dispute between the SEC and the CFTC.
Kalshi has asked the US Securities and Exchange Commission to delay approval of new binary options contracts from Cboe Global Markets, according to a report by Valor. The prediction-market platform made the request in a letter sent this month, signed by its compliance director, Sudhir Jain. The report says the move intensifies tension between event-betting platforms and traditional exchanges.
Attorney Josh Sterling said prediction market operators could pursue state sportsbook licences or expand into other financial products if the Supreme Court rules against their sports event contracts. New Jersey has asked the court to review the dispute after the Third Circuit ruled for Kalshi in April. The justices have not agreed to hear the case.
Attorney Josh Sterling told the NEXTPredict conference in New York on Friday that prediction market firms have options should the justices side against them on sports event contracts. Those options, the Milbank partner and former Commodity Futures Trading Commission official said, include applying for sportsbook licences, moving deeper into other financial products, or creating offerings that earn more. Covers reported his remarks. New Jersey wants the Supreme Court to settle the matter following the Third Circuit's April decision for Kalshi, but the justices have not yet granted review.
Nevada Gaming Control Board Chairman Mike Dreitzer said on a podcast that prediction market operators such as Kalshi are running illegal sportsbooks, and that Nevada has no fallback plan if the Supreme Court sides with them. He urged tribes and licensees to hold firm, even though several tribes have partnered with Kalshi this month. The comments followed a CFTC interim rule of 9 October excluding casino-style gambling products from the definition of a swap, alongside a proposed rule covering event contracts.
The NFL has filed a brief supporting New Jersey's request for US Supreme Court review of sports prediction markets. The report says 40 states also support the petition, filed on 2 September. The dispute concerns whether contracts offered by platforms such as Kalshi fall under state gambling laws or federal financial regulation.
A brief has been submitted by the NFL in support of New Jersey's bid for US Supreme Court review of whether platforms including Kalshi can sell sports-related prediction market contracts while sidestepping state gambling statutes. Jennifer Davenport, the state's attorney general, lodged the petition on 2 September. The report gives no indication of when the court will decide on granting review.
It was reported that the NFL petitioned the United States Supreme Court over state oversight of prediction markets. The league wants states to have authority to regulate those markets.