US election leaves prediction market legal disputes before courts
Regulation1 min read
In brief
- New Jersey's attorney general asked the Supreme Court in September to review state regulation of sports event contracts.
- Law professor Bob Jarvis expects the Supreme Court to hear the challenge.
New Jersey Atty. Gen. Jennifer Davenport petitioned the Supreme Court in September to consider whether states may regulate sports offerings on prediction markets. Democrats took control of both the House and the Senate in the mid-term election.
Since they began offering sports event contracts in 2025, Kalshi and Polymarket have been in court with states. State gaming regulators accuse the companies of breaking state gaming laws. The platforms argue that their contracts are not like traditional sports betting, and that only the Commodity Futures Trading Commission regulates them, at the federal level. The CFTC has tried to claim that authority.
Bob Jarvis teaches law at Nova Southeastern University in Florida and focuses on gaming. In his view, the mid-terms are unlikely to significantly affect prediction markets. Jarvis said, "I believe that the U.S. Supreme Court will agree to hear New Jersey’s challenge to Kalshi." He also thinks Trump was weakened by the mid-terms, and that this could have some influence on New Jersey's case. Jarvis predicts the Court will ultimately side with the states.