New Jersey Has One Month to Take Prediction Market Battle to the Supreme Court
New Jersey has made the first formal Supreme Court filing in the sports prediction market preemption fight.
The Garden State was asking Justice Samuel Alito for additional time to seek review of the Third Circuit’s ruling allowing Kalshi to continue offering sports-event contracts in the state. Alito granted a shorter extension than the state requested, giving New Jersey until August 4 to file its petition rather than the September 3 deadline the state had sought.
The filing, docketed June 30 under the caption Flaherty v. KalshiEX, LLC, does not mean the Supreme Court has agreed to hear anything. New Jersey has not yet filed the petition itself. But the docket entry moves the prediction markets fight onto the SCOTUS record for the first time, and the strategic considerations visible in New Jersey’s filing illuminate how the path to a definitive ruling is likely to develop, and why the Sixth Circuit, which everyone has been watching as the most consequential appellate venue, may not be the one that actually gets there first.
New Jersey is Waiting on July 30 Decision
The extension request was not purely procedural. New Jersey Solicitor General Jeremy Feigenbaum told the court that imminent rulings in related cases could bear on how the state presents its petition and whether a circuit split exists by the time it files. That language lays out a roadmap: New Jersey wants to know what the Sixth Circuit decides on July 30 before it asks the Supreme Court to act.
The circuit split point matters because the Supreme Court is structurally more likely to grant certiorari when lower courts have reached conflicting conclusions on the same federal question. The Third Circuit found in April that Kalshi’s sports event contracts are likely swaps preempted from state regulation. The Western District of Michigan found in June, in the Polymarket case we covered at the time, that sports event contracts are likely not swaps and that state gambling law is not preempted on any available theory. That district-level conflict does not yet constitute a formal circuit split, but it signals where one is likely to develop.
Gaming attorney Daniel Wallach captured the strategic logic concisely: New Jersey is better positioned seeking Supreme Court review with a circuit split than without one. The August 4 deadline gives the state enough runway to incorporate whatever the Sixth Circuit says on July 30 into a petition framed around a genuine conflict between circuits rather than a single appellate ruling.
New Jersey Case Might Get to SCOTUS Before the Sixth Circuit Cases
The conventional wisdom in prediction markets coverage has treated the Sixth Circuit as the pivotal venue, and for good reason: the consolidated Ohio and Tennessee appeals, scheduled for oral argument July 30 in Cincinnati, involve the CFTC as an active party, carry a 39-state amicus coalition, and have produced more extensive lower court records than most of the other pending cases. A Sixth Circuit ruling against Kalshi would create the cleanest possible circuit split against the Third Circuit and would almost certainly generate a certiorari petition.
But the New Jersey case has a structural head start that the Sixth Circuit cases do not. The Third Circuit already issued a ruling in April at the preliminary injunction stage. New Jersey is now filing on the SCOTUS docket. The procedural sequence in New Jersey is simply further along than in any other jurisdiction in the Sixth Circuit, where the appellate court has not yet heard oral argument, let alone issued a decision.
If New Jersey files its petition in early August, and the Sixth Circuit issues a decision sometime in the fall after July 30 arguments, the New Jersey petition could already be before the Supreme Court by the time a Sixth Circuit ruling creates the formal circuit split that would prompt the justices to grant review. The SCOTUS path through New Jersey does not require waiting for the Sixth Circuit to finish.
There is also a qualitative consideration here. The Third Circuit ruling came at the preliminary injunction stage, which means the Supreme Court would be reviewing a finding of likelihood of success on the merits rather than a final judgment on the merits. Some justices prefer to wait for a case to fully develop before granting review. But others have granted certiorari at the preliminary injunction stage when the underlying legal question is sufficiently important, and Feigenbaum’s framing of the preemption question as “tremendously important” is clearly designed to make that case.
Kalshi’s Legal Team Signals Supreme Court Seriousness
The composition of Kalshi’s legal team in this case removes any ambiguity about whether the company views Supreme Court litigation as a real possibility rather than a remote contingency. New Jersey served its extension application on Milbank attorneys Neal Katyal and Gurbir Grewal, listed as counsel for Kalshi.
Katyal served as acting U.S. solicitor general under President Obama and has argued dozens of cases before the Supreme Court. He is among the most prominent Supreme Court litigators in the country, and his presence in a prediction-market case at the preliminary injunction stage is no accident. Companies do not retain former solicitors general for cases they expect to resolve at the appellate level. Grewal brings complementary credentials: former New Jersey attorney general and former director of the SEC’s Division of Enforcement, giving him direct familiarity with both New Jersey gambling regulation and federal financial oversight, the two domains in direct conflict in this case.
The service filing does not confirm that Katyal or Grewal would argue before the Supreme Court if review is granted. It does confirm that Kalshi has assembled a legal team with the depth to handle that fight, and has done so at an early enough stage to suggest the company has been planning for Supreme Court litigation for some time. The writing has been on the wall that the national battle regarding prediction markets would ultimately be settled in the Supreme Court, and Kalshi is aligning its pieces on the board.
A SCOTUS Ruling Would Bring a Meaningful Resolution
The stakes of a Supreme Court ruling on the preemption question are significant enough that both sides have strong incentives to reach a decision. For Kalshi and the prediction market industry, a favorable ruling would provide national legal clarity that no collection of circuit court decisions can fully substitute for: a definitive answer that sports event contracts on federally licensed exchanges fall outside state gambling law’s reach, removing the uncertainty that has prompted over a dozen states to pursue enforcement actions.
For New Jersey and the 39-state coalition that filed an amicus brief in the Sixth Circuit cases, a favorable ruling would restore the ability to apply state gambling laws to prediction-market products, which they argue are functionally indistinguishable from sports betting. Feigenbaum’s framing of the Third Circuit ruling as one that would “federalize a multibillion-dollar-a-year sports-wagering industry at the expense of every state law in the country” is designed to convey exactly how much the states believe is at stake.
What a Supreme Court ruling at the preliminary injunction stage would not necessarily resolve is the underlying question of whether Kalshi’s specific contracts qualify as swaps under a final merits determination. The Third Circuit found Kalshi showed a reasonable likelihood of success. A SCOTUS affirmance of that finding would be a significant win for the platforms, but it would not be the same as a final ruling on the merits. Some of the litigation now playing out across multiple circuits would likely continue regardless.
The August 4 deadline gives New Jersey just under five weeks to decide whether to file. The July 30 Sixth Circuit arguments give it a data point that could shape how it frames the petition. Whether those two timelines interact the way New Jersey appears to hope depends on whether the Sixth Circuit moves faster than most appellate courts after oral argument, which would be unusual.
The Supreme Court docket now has its first prediction markets entry and will most certainly not be its last.
Players trust our reporting due to our commitment to unbiased and professional evaluations of the iGaming sector. We track hundreds of platforms and industry updates daily to ensure our news feed and leaderboards reflect the most recent market shifts. With nearly two decades of experience within iGaming, our team provides a wealth of expert knowledge. This long-standing expertise enables us to deliver thorough, reliable news and guidance to our readers.
Latest News
