New Jersey has asked the U.S. Supreme Court to decide whether states can regulate sports betting on prediction markets like Kalshi. The state’s Attorney General, Jennifer Davenport, said in a press release that companies like Kalshi claim to offer legal sports betting across all 50 states but refuse to comply with individual state gambling laws. This request comes after a recent legal decision that complicated the regulatory landscape for sports betting in the U.S. In April, the U.S. Court of Appeals for the 3rd Circuit ruled that New Jersey cannot regulate sports bets on prediction markets, stating that contracts related to sports events meet the legal definition of "swaps." This classification gives the U.S. Commodity Futures Trading Commission (CFTC) exclusive authority over such contracts. New Jersey’s petition to the Supreme Court argues that this decision has significant practical and legal implications, suggesting that Kalshi is attempting to federalize the multi-billion-dollar sports betting industry, potentially undermining state laws governing sports gambling. The situation has grown more complex following a recent ruling by the 9th Circuit Court of Appeals, which said Nevada can prevent Kalshi from allowing sports bets. Unlike the 3rd Circuit, the 9th Circuit judges determined that sports betting labeled as "swaps" is essentially just gambling under a different name. This disagreement between the two appellate courts has created a legal split, which could lead the Supreme Court to intervene and resolve the issue. New Jersey’s legal team emphasized that this split between the circuits is crucial because it may determine whether the multi-billion-dollar gaming industry can operate without adhering to state sports-gambling laws. The uncertainty has increased the likelihood that the Supreme Court will take up the case. Meanwhile, Kalshi reportedly has stated it will not allow bets on the outcome of the case. Davenport’s office explained that New Jersey’s petition asks the Supreme Court to address a nationwide legal question: whether prediction markets can offer sports wagers without following state sports-gambling laws. Legal disputes over this issue have arisen in at least 20 states, with numerous lawsuits still pending and some state gambling laws currently blocked by federal courts. This is the first time a certiorari petition has been filed with the Supreme Court regarding the legality of Kalshi’s business model.