A group of US state lawmakers has filed an amicus brief with the US Supreme Court, urging justices to weigh in on a case between prediction markets platform Kalshi and gaming authorities.
On Tuesday, the National Council of Legislators from Gaming States (NCLGS) filed in the US Supreme Court, supporting New Jersey‘s Attorney General and gaming authorities’ petition for a writ of certiorari. The petition, filed on Sept. 2, asked the nation‘s highest court to consider New Jersey’s case against Kalshi, potentially resolving whether state authorities or federal agencies have jurisdiction over prediction market companies.
In its amicus curiae filing supporting New Jersey‘s position, the NCLGS argued that a ruling favoring Kalshi would “[render] states powerless” to regulate sports betting on prediction markets, causing “substantial harm and confusion.” According to the group, “gaming-related matters” should be left to individual US state authorities, though the filing did not address the competing argument that event contracts traded on federally regulated markets fall under the CFTC’s exclusive jurisdiction.
“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,” said state lawmakers. “Entire state regulatory regimes surrounding this vice activity will have to be reconsidered in light of any preemption found in this area.”
The Supreme Court petition, filed by New Jersey authorities as part of an appeal following a decision from the US Court of Appeals for the Third Circuit, has not received an official response from Kalshi. The company has until Nov. 9 to file a brief stating its position in the case, but a spokesperson told Cointelegraph after the initial filing that it could not be “regulated by 50 different regulators.”
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