A bipartisan coalition of 39 states has thrown its weight behind New Jersey's request that the Supreme Court settle whether states can regulate prediction markets, accusing lower courts of being "hopelessly confused and divided" on the issue.
The amicus brief, led by Ohio Attorney General Andy Wilson (R) and joined by the District of Columbia and 38 other states, was filed Wednesday in support of New Jersey's petition. The Garden State asked the justices last month to resolve a growing circuit split over the legal status of platforms like Kalshi and Polymarket.
Those platforms, backed by the Trump administration, argue that their products should be classified as "swaps" under federal law, placing them under the exclusive oversight of the Commodity Futures Trading Commission (CFTC). But the states counter that such a designation would strip them of their "core sovereign power" to regulate gambling within their borders.
"The prediction markets are wrong," the states wrote. "They cannot strip the States of their core sovereign power through relabeling and window-dressing. Our constitutional structure is much more durable than that. And the promise of federalism ensures that States do not lose their ability to protect their citizens so easily."
The dispute escalated last year when Kalshi sued New Jersey to block enforcement of state gambling laws. The company won before the 3rd U.S. Circuit Court of Appeals, deepening an emerging split among federal appeals courts. The Supreme Court is scheduled to consider the case at a closed-door conference later this term.
States retain broad authority to tax and regulate gambling, but prediction markets argue their offerings are distinct from traditional betting. The states, however, insist that allowing these platforms to bypass state oversight would eliminate "guardrails" and endanger citizens.
"That almost all the nation's States have spoken with one voice on the matter should be enough," the brief stated.
Adding to the pressure, the National Football League filed its own brief Thursday, raising concerns that the CFTC lacks the resources to ensure prediction markets "do not jeopardize game integrity." The league contrasted federal oversight with state gaming authorities, which it said have worked with the NFL for years to establish structural safeguards.
"All this stands in stark contrast to state gaming authorities, which have engaged with the NFL for years to establish structural safeguards that provide core integrity protections," the NFL wrote.
The case is one of several high-stakes legal battles heading to the high court, including a decision on mandatory detention for undocumented immigrants and a showdown over press access. The outcome could reshape how prediction markets operate across the country, with implications for both financial regulation and state sovereignty.
