State lawmakers tell SCOTUS: Kalshi win would leave 50 regulators guessing 🎲

The National Council of Legislators from Gaming States has asked the US Supreme Court to take up New Jersey's fight with prediction markets platform Kalshi, throwing its weight behind state regulators in a battle over who gets to oversee sports-event contracts. The group filed an amicus curiae brief on Tuesday in support of a petition for a writ of certiorari that New Jersey's Attorney General and gaming authorities submitted on Sept. 2.

At issue is whether Kalshi's federally regulated event contracts fall under the Commodity Futures Trading Commission's exclusive jurisdiction or can be policed by state gaming regulators. A ruling for Kalshi, the NCLGS argued, would "[render] states powerless" to regulate sports betting on prediction markets and cause "substantial harm and confusion." Lawmakers added that "gaming-related matters" should be left to individual state authorities, though the filing did not address the competing argument that the CFTC holds sole authority over these products.

State lawmakers warned of wider fallout if Kalshi prevails, stating: "If Kalshi's self-described 'sports betting' activities are deemed beyond state regulation, then casinos, pari-mutuel operators, and other heavily regulated entities are certain to amend their business and products to seek the same status." They continued: "Entire state regulatory regimes surrounding this vice activity will have to be reconsidered in light of any preemption found in this area."

The petition stems from New Jersey's appeal after the US Court of Appeals for the Third Circuit ruled against state authorities. Kalshi has not yet filed an official response, with a deadline of Nov. 9 to submit its brief. A Kalshi spokesperson previously told Cointelegraph the company could not be "regulated by 50 different regulators." Kalshi separately moved into US stock perpetual futures with its own filing, following Coinbase's lead in that market.