New Jersey filed a petition for writ of certiorari on September 2, asking the US Supreme Court to review a Third Circuit ruling favoring prediction market operator Kalshi. The dispute began in 2025, when the New Jersey Division of Gaming Enforcement alleged that Kalshi was offering unauthorized sports wagering through event contracts that functioned as sports bets under state law. Kalshi argued that its products are swaps regulated under the Commodity Exchange Act and its Dodd-Frank amendments because it operates as a CFTC (U.S. derivatives regulator)-designated contract market. A federal district court blocked New Jersey’s enforcement efforts, and the Third Circuit upheld that preliminary injunction in a 2-1 decision on April 6, 2026. The Supreme Court petition follows an August 28 Ninth Circuit ruling in a separate Nevada case that reached the opposite conclusion on sports event contracts, creating a circuit split. Attorney General Jennifer Davenport said prediction market providers have misrepresented their legal status by asserting that they can offer legal sports betting nationwide without following local laws. At least 20 states have a direct interest, while the broader gaming industry affected by the dispute is valued in the multiple billions of dollars. A ruling for Kalshi would reinforce federal preemption over contracts traded on CFTC-designated markets, while a ruling for New Jersey could require prediction market operators to obtain state licenses, pay state taxes and meet differing consumer-protection rules for sports-linked contracts.