US Lawmakers from Gaming States Urge Supreme Court to Address Kalshi Case
A coalition of US state lawmakers representing gaming-heavy states has submitted an amicus brief to the US Supreme Court, urging justices to review the case involving prediction market platform Kalshi and state gaming authorities. They back New Jersey’s Attorney General's petition, emphasizing the need to clarify whether state agencies or federal bodies hold regulatory jurisdiction over prediction market companies.
Case Background and Lawmakers' Position
On September 9, the National Council of Legislators from Gaming States (NCLGS) submitted an amicus curiae brief to the US Supreme Court in support of New Jersey Attorney General’s petition for a writ of certiorari. The case involves a dispute between the state of New Jersey and Kalshi, a platform facilitating trading in event prediction contracts.
The NCLGS brief stresses that a ruling favoring Kalshi risks stripping states of authority to regulate sports betting, which could cause significant enforcement challenges. The lawmakers argue that gaming-related regulatory matters should remain within the jurisdiction of individual states, consistent with longstanding regulatory traditions in this sector.
Arguments and Next Steps
The NCLGS warns that if Kalshi’s activities are deemed exempt from state regulation, casinos and other licensed operators might alter their business models to seek similar treatment and escape local oversight.
New Jersey’s petition followed a decision by the US Court of Appeals for the Third Circuit, which left the dispute unresolved. Kalshi has not yet officially responded to the Supreme Court petition but previously stated resistance to being regulated by multiple state jurisdictions.
Kalshi has until November 9 to submit its brief outlining its stance before the Supreme Court. The court’s ruling could set a significant precedent defining the regulatory scope between state authorities and federal agencies over prediction markets.
Why it matters
This case represents a pivotal intersection between traditional state regulatory authority over gambling and emerging online platforms operating prediction markets. A Supreme Court ruling favoring Kalshi could effectively curtail states' ability to regulate sports betting on such platforms, potentially triggering major structural shifts in gambling regulation and jeopardizing existing tax and oversight frameworks. Consequently, the case's outcome may prove decisive for the future of prediction markets and the gaming industry in the US, affecting the balance of regulatory power between federal and state levels.
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