39 states side with New Jersey against prediction markets in SCOTUS brief

A coalition of 39 states has asked the Supreme Court to take up New Jersey’s dispute with Kalshi, arguing that federal law should not prevent states from applying gambling restrictions to sports-event contracts. The amicus brief was filed on Wednesday, Oct. 7, 2026, according to Next Event Horizon.

The coalition spans political divisions and different approaches to gambling: some participating states permit legal sports betting, while others prohibit gambling entirely. CNN’s Marshall Cohen highlighted support from states including Alabama, California, Michigan, Nevada and Pennsylvania. Next Event Horizon reported that 10 states did not join, with Texas and Florida the largest among those absent.

Conflicting rulings put federal authority in focus

The Third Circuit upheld a preliminary injunction favoring Kalshi in its dispute with New Jersey. But Kalshi has lost similar cases in the Ninth and Sixth circuits, according to Next Event Horizon. Other circuits could also weigh in on whether federal law permits sports-event contracts, leaving the industry facing divergent judicial outcomes.

The states challenge the argument that these contracts are swaps subject exclusively to the Commodity Futures Trading Commission’s authority. Their brief contends that the Commodity Exchange Act does not clearly displace state gambling powers. They also invoke state sovereignty, consumer protections and the major questions doctrine in asking the Supreme Court to resolve the disagreement.

Regulators and tribal interests add pressure

The International Association of Gaming Regulators and the North American Gaming Regulators Association also asked the Supreme Court last week to hear New Jersey’s case, according to SBC Americas, as cited by Next Event Horizon. Their filing emphasizes that sports betting falls within Class III gaming under the Indian Gaming Regulatory Act and that Maine and Michigan have reserved some or all of their mobile markets for tribes. The regulators argue that offering equivalent products outside tribal compacts undermines enforcement of those agreements. Next Event Horizon also reported that the NFL sided with New Jersey.

Tribal opposition is not universal. Four tribes in California and Oklahoma launched prediction apps with Kalshi on Wednesday, including the Kletsel Dehe, according to CNN’s reporting cited by Next Event Horizon. CNN reported that hundreds of other tribes oppose the platforms over alleged encroachment on their gaming rights, with sports prediction markets accounting for over 80% of the business.

What it means for prediction markets

• Court review is the immediate issue: The briefs seek Supreme Court intervention; they are not a ruling on whether states can restrict sports-event contracts.
• Legal outcomes remain divided: Kalshi’s favorable preliminary-injunction result in the Third Circuit contrasts with losses in the Ninth and Sixth circuits.
• The dispute reaches the core product: A decision on federal preemption would address whether state gambling restrictions can apply to sports-event contracts.
• Tribal interests are split: New Kalshi partnerships coexist with broad tribal opposition, complicating the industry’s regulatory and commercial relationships.