New Jersey has asked the U.S. Supreme Court to decide whether federal derivatives law prevents states from regulating sports contracts offered by CFTC-registered prediction markets, filing a September 2 petition for a writ of certiorari after losing to Kalshi in the Third Circuit. Attorney General Jennifer Davenport and Mary Jo Flaherty, acting director of the Division of Gaming Enforcement, urged the justices to confirm that Congress did not quietly exempt the sports-betting industry from state law, arguing firms such as Kalshi claim they can offer sports betting in all 50 states without following state gambling rules. In a 2-1 decision on April 2, the Third Circuit upheld preliminary relief blocking New Jersey enforcement, finding Kalshi had a reasonable chance of showing sports event contracts qualify as swaps under the Commodity Exchange Act and that CFTC exclusive jurisdiction could displace conflicting state requirements. The petition also challenges the CFTC’s treatment of sports betting on prediction markets as swaps and contends federal law does not preempt state sports-gambling laws. A conflicting Ninth Circuit ruling recently allowed Nevada to enforce its gaming laws, treating sports contracts as likely wagers rather than CEA-covered swaps and creating opposing rules across circuits. Kalshi spokesman Dani Lever said the company cannot be regulated by 50 different agencies, remains confident in the lower-court ruling, and said New Jersey’s petition does not change its position. It is unclear whether the Supreme Court will grant review; some experts say the court may first take a separate prediction-market case pending before an appeals court in Nevada. Related enforcement has spread widely: New York has sued Kalshi seeking at least $36 billion, a federal judge rejected Coinbase’s bid to block Michigan action, Arizona has filed criminal charges, and by mid-August more than 20 lawsuits and cease-and-desist actions were pending nationwide. Private valuations remain elevated, with Kalshi’s Series F at a $22 billion valuation, roughly $1.12 billion in equity sold since April, annualized trading volume cited at $178 billion, and sports estimated at 85%–90% of volume; Polymarket is reportedly seeking funding at about a $21 billion valuation.