New Jersey asks the Supreme Court to resolve the split over Kalshi's sports contracts

New Jersey Attorney General Jennifer Davenport filed a petition for a writ of certiorari with the U.S. Supreme Court on September 2, 2026, asking the Court to review a Third Circuit ruling that has blocked the state from enforcing its gambling law against Kalshi's sports-outcome event contracts. The petition, docketed at the Supreme Court as No. 25-1002 and captioned Flaherty v. KalshiEX, was filed one day before an extended September 3 deadline the Court had granted the state. It asks the justices to decide whether the Commodity Exchange Act preempts state authority over sports wagers offered through a federally registered derivatives exchange, the same question this desk covered on August 28, 2026, when the Ninth Circuit reached the opposite conclusion in a Nevada case.

Two circuits, two answers

The Third Circuit ruled 2-1 on April 6, 2026, in KalshiEX LLC v. Flaherty, No. 25-1922, holding that Kalshi's sports-outcome contracts are swaps regulated exclusively by the Commodity Futures Trading Commission, and that the Commodity Exchange Act preempts New Jersey's gambling law as applied to them. That ruling affirmed a preliminary injunction that has kept New Jersey from enforcing its law against Kalshi since April 2025.

Four months later, the Ninth Circuit read the same federal statute the opposite way. Ruling on August 28, 2026 in KalshiEX, LLC v. Assad, No. 25-7516, a unanimous panel held that Nevada's gambling law is not preempted, clearing the way for Nevada to enforce its licensing requirement against the same kind of contracts. New Jersey's petition names that ruling directly as the circuit split it wants the Supreme Court to resolve.

What the petition asks

The 332-page petition presents the Supreme Court with a single question: whether the Dodd-Frank Wall Street Reform and Consumer Protection Act preempts states from regulating sports wagers occurring within their borders when the wagers are offered on markets registered with the CFTC. Davenport, joined by New Jersey Division of Gaming Enforcement interim director Mary Jo Flaherty, the named party in both the Third Circuit case and the new Supreme Court filing, said in a statement accompanying the petition that "companies like Kalshi claim to offer legal sports betting in all 50 States, but they refuse to follow the gambling laws of any State." The filing cites civil enforcement actions against prediction-market platforms brought by gaming regulators in at least 20 states as evidence the conflict extends well beyond New Jersey and Nevada.

A cert petition is a request, not a ruling. The Supreme Court has not said whether it will take the case, and Kalshi has not yet filed a response. If the Court declines to hear it, the two circuit rulings stand as written, meaning Kalshi's sports contracts would remain lawful in New Jersey under the existing injunction while remaining subject to enforcement in Nevada.

What this does not change, yet

Nothing about a reader's state changes today. New Jersey remains one of the seven states with a live regulated iCasino market, and its sportsbook licensing regime is untouched by this filing; Kalshi's sports contracts there stay protected by the Third Circuit's injunction unless and until the Supreme Court says otherwise. Nevada is licensed for online poker only, not a general iCasino market, and the Ninth Circuit ruling already in effect there is what New Jersey is now asking the high court to weigh against. A reader in either state should treat Kalshi's sports-contract status as unsettled and under active litigation, not resolved in either direction.