New Jersey is asking the Supreme Court to weigh in for the first time on regulation of prediction markets like Kalshi and Polymarket — potentially paving the way for the Garden State to shut them down.
New Jersey Attorney General Jennifer Davenport filed a petition with the highest court in the land on Wednesday, asking it to review a lower court’s decision that prediction markets are subject only to federal regulation.
“We’re calling on the Supreme Court to resolve this issue and recognize that Congress did not silently make the sports-betting industry immune from state law,” the Democratic prosecutor said in a statement.
“States have long adopted careful laws to regulate gambling, including to prevent compulsive gambling, gambling by minors, and insider trading on sports games,” she added.
The industry is overseen by the federal Commodity Futures Trading Commission. But state AGs from both sides of the political aisle across the country, along with dozens of Native tribes and the casino industry, have launched a movement to subject prediction markets to the same state laws regulating casinos and sportsbooks.
Prediction sites, which have seen an explosive rise in popularity over the past few years, allow users to bet on everything from sports and pop culture to politics.
Critics have argued that they operate as unlicensed sportsbooks, skirting state laws and taxes and allowing young gamblers – legally blocked from other forms of sports betting – onto the platforms.
It is likely the Supreme Court will decide in the fall whether it wants to take up the case. If it does, a decision would be expected around next summer.
State oversight of prediction markets could mark a major setback for the companies, which do billions of dollars in trading volume per week.
Both the companies and President Trump himself have strongly pushed back against state regulation, with the commander-in-chief writing on social media earlier this year, “It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive” — and adding a personal dig at some state officials.
Kalshi spokeswoman Dani Lever repeated the company’s criticism on Wednesday.
“Kalshi is an open, nationwide financial exchange. It cannot be regulated by 50 different regulators,” she said. “Both the Third Circuit and the District of New Jersey sided with Kalshi because the CFTC’s exclusive jurisdiction preempts state law.”
About 20 states across the country are engaged in legal battles with prediction markets, and the decisions have been mixed.
Davenport moved to shut down prediction markets in New Jersey last year, but in April, the Philadelphia-based Third US Circuit Court of Appeals upheld a ruling blocking the state from regulating Kalshi.
Just last week in Nevada, however, the Ninth US Circuit Court of Appeals ruled that states can regulate prediction markets as sports-betting platforms.
While the Third Circuit ruled that prediction sites are different from sportsbooks because they offer “event contracts” for trading, the Ninth Circuit argued that “Kalshi’s sports event contracts have the hallmarks of sports betting.”
Kalshi controls an estimated 90% of the US market for prediction platforms. Polymarket is the second-largest US prediction market.
Sports bets – combined with parlays, an all-or-nothing bundle of bets that is popular with sports gamblers – account for 80% of Kalshi’s overall volume.
Critics have argued that prediction sites allow people under age 21 to skirt the legal gambling age since they are regulated like financial markets — meaning they’re available to anyone 18 and older.
Young adults between 18 and 21 have traded $5.4 billion on Kalshi so far this year, including roughly $3.9 billion in sports and parlays, according to a recent CNN analysis.
Prediction market advocates have argued that 18-year-olds already have access to risky financial markets. Kalshi has added safeguards including deposit limits and warnings to users with patterns of risky behavior.
CFTC chairman Mike Selig, a Trump appointee, has taken a friendly approach to prediction markets, dismissing a request from the NCAA, NFL, NBA, PGA Tour and other sports leagues to raise the minimum trading age to 21.
The CFTC has also sued several states that tried to ban prediction sites and weighed in on the Nevada case, arguing that state regulators have no control over the platforms.
President Trump’s eldest son, Donald Trump Jr., is an investor and adviser to Polymarket and an adviser to Kalshi. A spokesperson for Trump Jr. has said he does not lobby federal officials on behalf of the sites.
The Post has sought comment from the White House and from Polymarket.
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