39 AGs Push Supreme Court to Settle Kalshi Prediction Market Fight
New Jersey's fight with Kalshi just got a lot bigger. Thirty-nine state attorneys general, along with the District of Columbia, have signed an amicus brief asking the Supreme Court to step in and settle how prediction markets get regulated.
The dispute itself is easy to describe. Resolving it is another matter. New Jersey wants the high court to throw out an appellate ruling that treats prediction contracts as financial instruments under the Commodity Futures Trading Commission. Let that reading stand and state gaming regulators lose their hook into platforms like Kalshi. No state money. No state enforcement. No state compacts.
There's already a split, and the brief lays it out. Back in August, the Ninth US Circuit Court of Appeals sided with Nevada and allowed the state to restrict sports-related prediction contracts. A month later, the Sixth Circuit said Tennessee and Ohio could apply their gambling laws to the same platforms. Both outcomes cut against what New Jersey got, and the reasoning doesn't line up either.
Three circuits, three different framings. The Ninth Circuit held that sports event contracts aren't swaps, though Commodity Exchange Act preemption would still apply. The Third Circuit went the other way and called sports contracts swaps outright. As for the Sixth Circuit, it found that CEA preemption doesn't reach this far. One product, three answers.
Tribal operators have entered the fray as well. The Cabazon Band of Cahuilla Indians filed its own amicus brief, warning that the Third Circuit's position could do lasting damage to tribal gaming nationwide. Prediction platforms that offer sports-related contracts on tribal land, the tribe argues, violate the Indian Gaming Regulatory Act and sidestep state compacts, cutting off revenue local communities rely on.
Two regulator bodies also weighed in. Both the International Association of Gaming Regulators and the North American Gaming Regulators Association backed Supreme Court intervention. Their worry: a wager banned in one state can pop up in the next as a federally regulated derivative. Uneven playing field, and it chips away at state oversight.
For affiliates, here's the practical read. The legal map can shift state by state faster than any compliance team can track it. Geo-targeting sports-related prediction offers right now is a bet on litigation, not regulation.
Kalshi gets the next move. The operator has until early November to answer New Jersey's petition. Should the Supreme Court grant cert, don't count on speed. Industry watchers don't see a final ruling before early 2027, which leaves prediction markets running under conflicting rules for at least another year.