Eleven briefs backing New Jersey raise questions about exchange self-certification, traditional sportsbooks, tribal sovereignty, age restrictions and even the Supreme Court’s PASPA ruling.
Bill Mason / Unsplash
New Jersey’s legal fight with Kalshi has drawn 11 amicus briefs urging the Supreme Court to take up the case. Among those weighing in are 39 states and Washington, D.C., the NFL, tribal governments, gambling regulators, former Sen. Christopher Dodd and former CFTC Chairman Gary Gensler.
The central issues are whether sports-event contracts are swaps subject to federal law and whether the Commodity Exchange Act (CEA) prevents states from regulating them as gambling. The Third Circuit sided with Kalshi in the New Jersey case, while the Sixth and Ninth Circuits have ruled in favor of officials in other states.
And while the Supreme Court has yet to agree to hear New Jersey’s petition, the supporting briefs raise questions that go well beyond the two main legal issues.
Self-Certification Raises Questions About CFTC Oversight and State Authority
The CFTC’s self-certification framework allows exchanges to list new contracts without prior agency approval. The CFTC can later review and prohibit them. That system has prompted several amici to question oversight and the relationship between federal and state regulatory authority.
Dodd, the Casino Association of New Jersey (CANJ), and the NFL approach those questions from different perspectives. Dodd argues that an exchange’s decision to list a sports contract should not determine whether state gambling laws apply. He challenges the Third Circuit’s reliance on the CFTC’s “exclusive jurisdiction” under the CEA to preempt state regulation.
The former senator notes that Congress expressly preempted certain state gaming laws for specific transactions and prohibited states from regulating swaps as insurance, but enacted no comparable provision for sports contracts traded on federally regulated exchanges.
CANJ raises a separate enforcement concern, arguing that the CFTC “has not enforced the few regulations specific to event contracts that are on its books.” The association points to existing restrictions on contracts involving gaming and questions why Kalshi’s sports contracts remain listed.
The NFL also questions the adequacy of federal oversight. Exchanges can generally begin trading self-certified contracts the next business day, while the CFTC’s June proposed rules would give the agency 10 days after listing to initiate a review. The league questions whether the agency has sufficient resources to scrutinize the growing number of contracts.
Together, the filings raise separate questions about the scope of federal preemption and the CFTC’s ability to supervise sports-event contracts.
Kalshi’s Swap Interpretation Could Also Restrict Traditional Sportsbooks
Another argument concerns the potentially unintended consequences of classifying sports wagers as swaps. Several amici, including Dodd and Gensler, argue that if ordinary sports wagers qualify as swaps, conventional sportsbook transactions could also fall within those restrictions.
Section 2(e) of the CEA generally prohibits individuals who are not eligible contract participants from entering into swaps outside federally authorized trading venues.
Gensler warns that under Kalshi’s interpretation, “all off-exchange retail sports bets since October 2012 [would] have been illegal.”
The NFL raises a related constitutional concern, arguing that the Third Circuit’s interpretation raises questions under the Commerce Clause and the major questions doctrine about federal authority over traditionally state-regulated gambling.
The CFTC has since moved to clarify the distinction between traditional gambling and exchange-traded contracts.
One day after most of the amicus briefs were filed, the CFTC issued an interim final rule to exclude casino-style gambling products from the definition of “swap.” A separate proposal would explicitly include event contracts tied to sports, politics, culture and weather as swaps.
The agency’s reasoning comes down largely to how the products operate. Traditional sportsbooks generally set the odds and take the opposite side of customers’ wagers, while prediction markets allow participants to trade contracts with one another at market-determined prices.
Prediction market operators have used that argument to distance themselves from traditional gambling by emphasizing that their platforms have no house acting as the counterparty.
The rulemakings seek to address some of the concerns identified by Dodd and Gensler by distinguishing conventional gambling from exchange-traded contracts. Whether the CEA supports that distinction remains a separate legal question.
Cabazon Cites $25 Kalshi Trade in Tribal Sovereignty Challenge
The Cabazon Band of Cahuilla Indians submitted one of the most concrete factual allegations in its amicus brief.
Jonathan Rosser, the tribe’s director of legal affairs, says he downloaded Kalshi on Sept. 22 and placed a $25 trade on the Minnesota Vikings – Tampa Bay Buccaneers game while sitting in his office on the Cabazon Indian Reservation in California. The potential payout was $45.66.
“Betting on sporting events, such as I was able to do through the Kalshi app, is not legal on the Cabazon Indian Reservation,” he states.
Tribal Gaming Commission Executive Director Jose Escobar Rivera separately asserts that the transaction violated the tribe’s gaming ordinance, its compact with California, and the Indian Gaming Regulatory Act (IGRA).
A separate coalition of 145 tribes and tribal organizations warns that the Third Circuit’s approach threatens the framework and tribal protections under IGRA.
A federal appeals court has already addressed the issue. Last month, the Ninth Circuit found that Kalshi’s sports contracts constituted Class III gaming under IGRA and were “located on Indian lands” when entered into from tribal territory. It concluded that two California tribes were likely to succeed on their IGRA claims.
Following the ruling, Kalshi voluntarily geofenced those tribes’ lands.
The question of tribal authority is perhaps one of the most important issues beyond the definition of swaps and preemption. The filings and the Ninth Circuit ruling raise a significant question: What happens when federal regulation of sports-event contracts intersects with tribal authority over gaming on Indian lands?
Kalshi’s 18+ Trading Age Highlights Differences in State Betting Rules
The American Gaming Association (AGA) highlights another difference between sportsbooks and prediction markets: minimum-age requirements. Most states require sports bettors to be at least 21. Kalshi, meanwhile, allows users 18 and older to trade event contracts.
The AGA cites an August CNN investigation estimating that 18- to 20-year-olds traded $5.4 billion on Kalshi during the first eight months of 2026. Of that, approximately $3.9 billion was on sports and parlays.
In New Jersey, state law requires individuals to be at least 21 to place a sports wager. However, an 18-year-old can trade sports-event contracts on Kalshi. The AGA argues that this distinction undermines states’ decisions about minimum ages and other gambling protections.
Kalshi, for its part, has pointed to voluntary safeguards for younger traders, including deposit limits and warnings about potentially risky trading behavior. Some prediction markets, such as Novig and Fanatics, have set a minimum age of 21.
NFL Warns of Sports Integrity Gaps in Prediction Markets
One of the NFL’s biggest concerns is safeguards tied to sports event contracts. The league identifies several categories of contracts that it believes should be prohibited due to risks to game integrity.
These include outcomes that can be easily manipulated by a single person, such as a missed field goal; wagers involving player injuries or misconduct; officiating decisions; and events whose outcomes may be known before they become public, such as whether a team’s first play will be a run or a pass.
The league also raises concerns about insider trading. It argues that exchanges need access to up-to-date lists of prohibited bettors to prevent trading by players, coaches, team employees and others who may possess nonpublic information.
In its brief, the NFL criticizes the CFTC and prediction-market operators for failing to adopt several safeguards it requested earlier this year. It also says the existing and proposed federal frameworks lack a defined procedure for leagues to seek the emergency suspension of contracts when credible integrity concerns arise.
State gaming regulators point to different procedures already used in licensed sports betting. The International Association of Gaming Regulators and the North American Gaming Regulators Association cite Illinois, where officials can immediately suspend wagering that poses serious integrity risks, and Massachusetts, where regulators review and can restrict specific wager categories.
While the CFTC maintains broad general prohibitions against market manipulation and the misuse of nonpublic information, the NFL’s core question is whether those financial-market mechanisms are suited to policing the unique, fast-moving integrity risks of professional sports.
Anti-Gambling Groups Ask Supreme Court to Revisit 2018 PASPA Ruling
One of the more unusual requests comes from Stop Predatory Gambling, the Association of American Physicians and Surgeons, and Texans Against Gambling.
The organizations want the Supreme Court to reconsider part of its 2018 decision in Murphy v. NCAA, which struck down the Professional and Amateur Sports Protection Act (PASPA), thereby allowing states to legalize sports betting. Notably, New Jersey itself led the legal challenge that produced the landmark ruling and opened the door to state-regulated sports betting.
Their argument focuses on Section 3702(2), which prohibited private entities from operating or promoting sports wagering pursuant to state law or government compacts. The amici contend that the original challengers lacked Article III standing to contest that provision, which the Court invalidated through its severability analysis.
The Murphy ruling was not unanimous on severability. Three justices disagreed with the majority’s approach, while Justice Clarence Thomas separately questioned the Court’s severability precedents.
The organizations argue that Section 3702(2) should remain enforceable and could apply to Kalshi’s sports contracts.
However, because New Jersey has not asked the Court to reconsider Murphy, the organizations seek to add a separate question beyond the prediction-market dispute presented in the petition.
Supreme Court Review Remains Uncertain
The Supreme Court has not yet agreed to hear New Jersey’s petition, despite conflicting appellate rulings. The Court could take up the dispute this term or wait for additional developments, including further appellate decisions and CFTC rulemaking.
So far, 11 amicus briefs have been filed in support of New Jersey, with no filings supporting Kalshi or from the CFTC in this case. Kalshi’s response to the petition is due Nov. 9, and amici supporting the exchange may also file briefs by that deadline.
Whether the Court will agree to take up the case remains unknown. The filings, however, show that the dispute extends well beyond questions of swaps and federal preemption.
