New Jersey Files 332-Page SCOTUS Petition — First State to Ask Supreme Court to Rule on Prediction Markets
New Jersey Attorney General Jennifer Davenport filed a 332-page certiorari petition with the U.S. Supreme Court on September 2, formally asking the Court to resolve whether Dodd-Frank preempts states from regulating sports bets on CFTC-registered prediction market platforms. New Jersey is the losing party from the Third Circuit's April ruling for Kalshi and can cite the Ninth Circuit's August 28 ruling against Kalshi as direct circuit conflict. Kalshi has 30 days from docketing to file a response; SCOTUS has approximately 90 days to decide whether to grant review. The probability of SCOTUS taking the case by year-end has settled at around 46% on Polymarket after an initial spike to 64%.
New Jersey Attorney General Jennifer Davenport filed a writ of certiorari with the United States Supreme Court on September 2, 2026 — the first state in the country to formally ask the Court to resolve the prediction market sports contract question. The 332-page petition poses the central question directly: whether the Dodd-Frank Wall Street Reform and Consumer Protection Act preempts states from regulating sports bets that occur within their jurisdictions if those bets are offered on markets registered with the Commodity Futures Trading Commission. New Jersey was on the losing side of the Third Circuit's April 2026 ruling, which held that Kalshi's sports event contracts are swaps under the CEA and that CFTC jurisdiction is therefore exclusive. The Ninth Circuit's August 28 ruling, five days before NJ's filing deadline, ruled exactly the opposite — that sports contracts are not swaps and that states can regulate them. NJ's petition can now cite two federal appellate courts that reached opposite conclusions on the same statutory question about the same type of contract. That is the clearest possible circuit split trigger for SCOTUS review.
The procedural mechanics following the filing matter for anyone tracking the timeline. The Supreme Court clerk dockets cert petitions, and Kalshi — the respondent — has 30 days from docketing to file an opposition or waive response. After Kalshi's response (or the waiver deadline), the Court schedules the petition for conference. The Court conferences petitions in batches, typically adding them to the next available conference on the schedule. SCOTUS has approximately 90 days from filing to decide whether to grant or deny certiorari. If the Court grants review, the case would be argued in the October 2026 term — likely late 2026 or early 2027 with a decision by June 2027. If the Court denies review for this petition, that is not a final answer on the merits: additional circuits that rule on the question (the Second Circuit has two Kalshi appeals pending; the Sixth Circuit has Michigan) would create additional petitions, and SCOTUS can take the case later. Denial of NJ's petition would simply mean the Court is not ready to resolve the question on this particular record at this particular time.
The SCOTUS probability on Polymarket settled at around 46% after an initial spike to 64% following the Ninth Circuit ruling. The recalibration from 64% to 46% reflects market participants adjusting their estimate of timing rather than ultimate resolution. The probability that SCOTUS takes the case before year-end 2026 is genuinely uncertain — the Court's conference schedule, Kalshi's response time, and whether the Court sees an urgent need to resolve the split before additional circuits weigh in all affect the specific contract, which expires December 31. A longer-dated contract on 'will SCOTUS take the case by June 2027' would likely price significantly higher than 46%. The immediate question the Polymarket contract prices is whether the Court acts within its current October term's first conference cycle, which is a tighter window than the case's ultimate SCOTUS trajectory.
Legal observers have drawn a comparison to New Jersey's earlier SCOTUS battle over PASPA (the Professional and Amateur Sports Protection Act), which banned state-authorized sports betting. NJ lost that case at SCOTUS in Christie v. NCAA (2009) — but Congress repealed PASPA before SCOTUS revisited the issue, and when NJ ultimately challenged PASPA again in Murphy v. NCAA, the Court struck it down in 2018, enabling legal sports betting across the US. The parallel is instructive: NJ has a track record of litigating to the Supreme Court on state gambling authority questions and eventually prevailing on the underlying policy question even when the immediate legal battle is lost or stalls. Whether the Court takes NJ's prediction market petition now or the question arrives via a later petition from a different state, the Polymarket/Kalshi regulatory structure — binary contracts on sports outcomes offered on a CFTC-licensed exchange — will eventually receive a SCOTUS answer. NJ is attempting to accelerate that timeline.
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Utah Files Felony Charges Against Kalshi and Its Founders — Second State to Criminally Charge a Platform
Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanor, including a second-degree 'pattern of unlawful criminal activity' count and 12 counts of online gambling promotion. The charges stem from a September sting in which an undercover agent placed 12 sports wagers verified to be in Utah. The CFTC sued Utah the day before to block state enforcement, its tenth such suit. Utah is the second state after Arizona to criminally charge Kalshi, and the first to charge the founders personally. Kalshi called it a 'crazy overreach.'
NBA Names Kalshi and Polymarket Preferred Exchanges — Leaving the NFL Alone in Opposition
The NBA announced on October 26 that it has named Kalshi and Polymarket its 'preferred prediction market exchanges,' signed a non-binding memorandum of understanding with the CFTC on basketball integrity, and expanded its DraftKings deal to include prediction markets — the first league to extend a sportsbook partnership into the category. The exchange deals bar league and team personnel from trading NBA contracts, limit permissible markets, and require sharing of suspicious-trading data, in exchange for NBA intellectual property and official data. The NBA joins MLB, the NHL, and MLS as partnered leagues, leaving the NFL as the lone major holdout — and the only league fighting the platforms in court.
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinizing oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures attempting to trade 'oftentimes after the fact.' The remarks highlight the CFTC's dual and somewhat conflicting role as both the platforms' federal protector and their manipulation watchdog, at a time when the agency has shed enforcement staff.