Bipartisan coalition of states urge Supreme Court to let them regulate prediction markets
Dozens of states backed New Jersey on Wednesday in a high-stakes legal clash against prediction markets that has landed at the Supreme Court.
An amicus brief, signed by state attorneys general representing 39 states and Washington, D.C., urged the Supreme Court to take up a case brought forth by New Jersey, which is seeking to overturn an appellate court ruling earlier this year that found federal law regulating commodity trading superseded the state’s gambling laws.
The petition sets the stage for a courtroom battle that will determine whether states can regulate prediction markets like Kalshi and Polymarket, which Americans have increasingly used to bet on everything from sports, politics to cultural events.
The legal clash, the amicus brief said, “has splintered the circuits and lower courts with no resolution on the horizon. Only this Court can provide the much needed answer. It should do so.”
Related Knowledge Center: Prediction markets
Platforms are offering a way for users trade positions — place bets — on a wide range of possible events, and newsrooms are starting to incorporate the data.
As the business rapidly grows, critics and opponents are pushing back. Numerous states have argued that the markets are gambling, and sports gambling in particular is regulated by the state. The Commodity Futures Trading Commission, now led by a Trump appointee, disagrees — as did a federal district court judge in a suit involving New Jersey.
Critics see some of the markets as, particularly in the case of military actions, indefensible, and note as well that some large, well-timed bets — “event contracts” — suggest an abuse of insider knowledge of federal actions.