{"id":3937,"date":"2026-09-02T15:53:40","date_gmt":"2026-09-02T15:53:40","guid":{"rendered":"https:\/\/www.bettingjobs.com\/?p=3937"},"modified":"2026-09-09T15:53:51","modified_gmt":"2026-09-09T15:53:51","slug":"supreme-importance","status":"publish","type":"post","link":"https:\/\/www.bettingjobs.com\/bettingjobs-complianceandmore-partnerships\/supreme-importance\/","title":{"rendered":"Supreme importance"},"content":{"rendered":"<p><strong>If you don\u2019t stop and look around once in a while:<\/strong> New Jersey has asked the US Supreme Court to decide whether prediction market platforms can use federal commodities regulation to offer sports betting nationwide without complying with state gambling laws.<\/p>\n<ul>\n<li>The state says the justices must resolve an \u201cirreconcilable\u201d appellate split over whether sports event contracts are federally regulated swaps or bets subject to state gambling law.<\/li>\n<li>The petition for a writ of certiorari in <em>Flaherty v. KalshiEX<\/em> is the first prediction-markets case to reach the high court.<\/li>\n<li>It seeks review of an April decision by the Third Circuit Court of Appeals, which upheld an injunction preventing New Jersey regulators from enforcing their gaming laws against Kalshi.<\/li>\n<\/ul>\n<p><strong>You could miss it: <\/strong>The filing arrives less than a week after the Ninth Circuit reached the opposite conclusion in Kalshi\u2019s Nevada case. That 3-0 ruling held that Kalshi\u2019s sports event contracts were not \u201cswaps\u201d under the Commodity Exchange Act and therefore were not protected from state regulation by the Commodity Futures Trading Commission\u2019s exclusive jurisdiction.<\/p>\n<ul>\n<li>New Jersey says the result is a \u201cdirect, acknowledged, and irreconcilable split between the Third and Ninth Circuits\u201d over the meaning of the same federal statute.<\/li>\n<li>Kalshi remains protected from New Jersey enforcement under the Third Circuit\u2019s ruling, while the Ninth Circuit\u2019s reasoning supports state oversight within its nine-state jurisdiction.<\/li>\n<\/ul>\n<ul>\n<li>As <em>C+M<\/em> noted following the Nevada decision, that potentially opens the door to action in states including California, Arizona, Washington and Montana, with geofencing, licensing and gaming-tax requirements among the possible consequences.<\/li>\n<\/ul>\n<p><strong>On our patch:<\/strong> New Jersey Attorney General Jennifer Davenport said the petition was a defence of the states\u2019 established authority over gambling.<\/p>\n<ul>\n<li>\u201cCompanies like Kalshi claim to offer legal sports betting in all 50 States, but they refuse to follow the gambling laws of any State,\u201d Davenport said.<\/li>\n<li>\u201cThese companies have no right to offer their sports bets without following state law, which is why dozens of States across the ideological spectrum have opposed them.\u201d<\/li>\n<\/ul>\n<p><strong>A word:<\/strong> In a separate statement<a href=\"https:\/\/edition.cnn.com\/2026\/09\/02\/politics\/prediction-markets-supreme-court-new-jersey\"> reported by CNN<\/a>, Davenport said: \u201cWe\u2019re calling on the Supreme Court to resolve this issue and recognize that Congress did not silently make the sports-betting industry immune from state law.\u201d<\/p>\n<ul>\n<li>Congress expanded and defined \u201cswaps\u201d in the Commodity Exchange Act through the Dodd-Frank Act following the 2008 financial crisis.<\/li>\n<li>New Jersey argues that lawmakers did not use that definition to transfer oversight of an entire sports-betting industry from the states to the CFTC.<\/li>\n<li>\u201cAt issue is whether Congress federalized a multi-billion-dollar sports-betting industry via a single word and its definition \u2013 \u2018swap\u2019 \u2013 in Dodd-Frank,\u201d the petition said.<\/li>\n<li>It added that if Kalshi is correct, companies can disregard every state sports-gambling statute simply by registering with the CFTC.<\/li>\n<li>The state says the outcome will determine whether a multi-billion-dollar gaming sector can operate free from state laws governing matters including licensing, consumer protection, minimum-age requirements and taxation.<\/li>\n<\/ul>\n<p><strong>What the CFTC sees:<\/strong> The Third Circuit accepted Kalshi\u2019s narrower argument in a 2-1 ruling. Judge David Porter wrote for the majority that the contracts were swaps traded on a federally-regulated DCM and therefore fell within the CFTC\u2019s exclusive jurisdiction.<\/p>\n<ul>\n<li>The court concluded Kalshi was likely to succeed in showing that the Commodity Exchange Act preempted New Jersey law.<\/li>\n<li>Judge Jane Roth dissented, describing the sports contracts as \u201cvirtually indistinguishable\u201d from sportsbook products and arguing that New Jersey\u2019s laws complemented rather than conflicted with the federal regime.<\/li>\n<\/ul>\n<p><strong>What Nevada sees:<\/strong> The Ninth Circuit subsequently adopted reasoning much closer to Roth\u2019s. In the Nevada case, Judge Ryan Nelson wrote that \u201cKalshi has a gambling problem,\u201d while the unanimous panel said the company\u2019s sports contracts had \u201cthe hallmarks of sports betting.\u201d<\/p>\n<ul>\n<li>It rejected the contention that those products were swaps and stated: \u201cThe CFTC is not a national gambling regulator.\u201d<\/li>\n<\/ul>\n<p><strong>This is why we\u2019re here: <\/strong>The Ninth Circuit decision did not resolve the treatment of every event contract. Questions surrounding Kalshi\u2019s election contracts were returned to the lower court. But on sports, the two appellate courts have now supplied opposite answers to the same threshold question: does the federal definition of a swap encompass a sports event contract?<\/p>\n<ul>\n<li>That is precisely the kind of conflict the Supreme Court is often asked to resolve, although accepting the case is discretionary.<\/li>\n<li>CNN reported that the justices are likely to consider later this fall whether to grant review; if they do, a decision could follow by early next summer.<\/li>\n<\/ul>\n<p><strong>Selig vs. the states:<\/strong> The CFTC under chair Michael Selig has maintained that federally designated markets fall within its exclusive jurisdiction, supported Kalshi in Nevada and proposed rules that would preserve most sports event markets.<\/p>\n<ul>\n<li>The dispute has already drawn at least 20 states into litigation, according to New Jersey\u2019s petition.<\/li>\n<li>CNN noted that Nevada, Michigan and Washington have obtained court orders stopping at least Kalshi\u2019s sports offering, while a bipartisan group of 44 states has challenged the federal regulator\u2019s approach.<\/li>\n<li>Kalshi had not commented on New Jersey\u2019s filing at the time of the initial<a href=\"https:\/\/www.politico.com\/news\/2026\/09\/02\/new-jersey-supreme-court-prediction-markets-01061774\"> Politico<\/a>, CNN and Bloomberg Law reports.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/complianceandmore.substack.com\/p\/supreme-importance\">Like what you are reading? CLICK here to read the FULL article!<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you don\u2019t stop and look around once in a while: New Jersey has asked the US Supreme Court to decide whether prediction market platforms can use federal commodities regulation to offer sports betting nationwide without complying with state gambling laws. The state says the justices must resolve an \u201cirreconcilable\u201d appellate split over whether sports&hellip;<\/p>\n","protected":false},"author":13,"featured_media":3939,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","footnotes":""},"categories":[25],"tags":[],"class_list":["post-3937","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bettingjobs-complianceandmore-partnerships"],"acf":[],"post_author_name":"","post_authors_type":"","post_authors_from_team_members":false,"_links":{"self":[{"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/posts\/3937","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/comments?post=3937"}],"version-history":[{"count":1,"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/posts\/3937\/revisions"}],"predecessor-version":[{"id":3940,"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/posts\/3937\/revisions\/3940"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/media\/3939"}],"wp:attachment":[{"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/media?parent=3937"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/categories?post=3937"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bettingjobs.com\/af-api\/wp\/v2\/tags?post=3937"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}