New Jersey has petitioned the US Supreme Court to rule that sports bets offered through prediction market platforms such as Kalshi count as gambling, not federally regulated "swaps." The move comes after the 3rd Circuit Court of Appeals ruled in April that such bets fall under exclusive Commodity Futures Trading Commission jurisdiction, leaving New Jersey unable to enforce its own gambling laws against Kalshi. The case matters because it could determine whether prediction market operators can bypass all state sports-betting regulations simply by registering with the federal regulator.

New Jersey Attorney General Jennifer Davenport argues Kalshi offers sports betting nationwide while ignoring every state's gambling laws, calling the 3rd Circuit's decision "profoundly wrong." The petition follows a conflicting ruling roughly a week earlier, in which the 9th Circuit found Nevada could block Kalshi's sports bets, deeming them gambling regardless of their "swap" label under the 2010 Dodd-Frank Act. Davenport's office says similar litigation is under way in at least 20 states, with dozens of active suits and several states' gambling laws currently enjoined by federal courts; this is described as the first Supreme Court petition specifically challenging Kalshi's business model.