Supreme Court urged to let states regulate sports bets on prediction markets

New Jersey has petitioned the US Supreme Court to determine whether individual states possess the authority to regulate sports betting activities conducted through prediction markets like Kalshi. The state's Attorney General, Jennifer Davenport, argues that platforms like Kalshi are effectively operating as sportsbooks while bypassing state-level gambling regulations. This legal challenge follows a decision by the US Court of Appeals for the 3rd Circuit, which previously ruled that sports-related event contracts on these platforms qualify as "swaps." That classification grants exclusive oversight to the US Commodity Futures Trading Commission (CFTC), effectively preempting state-level gambling laws. New Jersey’s appeal seeks to overturn this precedent, asserting that these prediction markets should be subject to local oversight to ensure consumer protection and regulatory compliance. The outcome of this case could significantly impact the legal landscape for prediction-based betting platforms across the United States.