Gaming State Lawmakers Urge SCOTUS to Rein in Prediction Markets

The National Council of Legislators from Gaming States (NCLGS) has filed an amicus brief in support of New Jersey's petition to the Supreme Court, urging it to consider whether state gaming regulators can rein in platforms that offer event-based 'contracts' linked to sports and other outcomes.

The dispute centers around Kalshi, a prediction-market platform, which is at the center of a jurisdictional question: whether state governments or federal agencies have the legal authority to regulate such platforms. If the Supreme Court rules in favor of Kalshi, states would be powerless to regulate prediction-market sports betting, potentially undermining existing regulatory frameworks.

The NCLGS argues that a preemption ruling could force broader changes to the regulated gaming landscape across US jurisdictions, compelling states to reconsider entire regulatory regimes tied to 'vice activity' if federal preemption is found in this area. The Supreme Court has not yet ruled on the matter, with Kalshi's official response due by November 9.

New Jersey's Attorney General and gaming authorities are pursuing a petition for a writ of certiorari, which asks justices to consider New Jersey's case against Kalshi and potentially resolve a broader jurisdictional question affecting prediction markets. The outcome could hinge on how the Court interprets the relationship between state gaming authority and federal jurisdiction in this specific category of financial-like instruments tied to real-world events.