Bipartisan Coalition Of States Urge Supreme Court To Let Them Regulate Prediction Markets

Dozens of states backed New Jersey on Wednesday in a high-stakes legal clash against prediction markets that has landed at the Supreme Court.

An amicus brief, signed by state attorneys general representing 39 states and Washington, D.C., urged the Supreme Court to take up a case brought forth by New Jersey, which is seeking to overturn an appellate court ruling earlier this year that found federal law regulating commodity trading superseded the state’s gambling laws.

The petition sets the stage for a courtroom battle that will determine whether states can regulate prediction markets like Kalshi and Polymarket, which Americans have increasingly used to bet on everything from sports, politics to cultural events.

The legal clash, the amicus brief said, “has splintered the circuits and lower courts with no resolution on the horizon. Only this Court can provide the much needed answer. It should do so.”

It’s a show of unity between red and blue states as they challenge a booming new industry that has the support of Silicon Valley investors and President Donald Trump.

The states argue that prediction markets should be subject to their sports gambling laws, while the markets maintain that they are federally regulated exchanges and should abide by guidelines only set by the federal government.

The markets “claim to have discovered this no-state-law-applies escape hatch buried within a subsection of a section of a federal financial reform bill passed in the wake of the 2008 mortgage crisis,” the state attorneys general said in the amicus brief. “The prediction markets are wrong. They cannot strip the States of their core sovereign power through relabeling and window-dressing.”

The Trump administration has broadly blessed the expansion of these prediction markets, and the Commodity Futures Trading Commission, a federal regulator led by Trump appointee Michael Selig, has argued it should be the industry’s sole regulator.

It remains unclear whether the justices will take up the issue, but the request comes after judges in states like Nevada and Washington have ruled against Kalshi and several other cases are still awaiting rulings.