New Jersey asked the Supreme Court on Wednesday to weigh in on a growing legal battle between prediction markets and states over who has the authority to regulate the platforms. It marks the first time that the dispute, which has resulted in conflicting decisions at the appellate level, has been raised to the justices. “Companies...
Page F1From§Eachthe early bird edition — 2 September 2026
Kalshi loses unanimously at appeals court, sued by second state, takes its odds to the Supreme Court
As it ran on the front
New Jersey Attorney General Jennifer Davenport filed a petition with the Supreme Court on Wednesday asking the justices to decide whether Kalshi's sports contracts are gambling. The company did not have to wait long to learn what other courts already think.
Five days earlier, the 9th Circuit Court of Appeals ruled — unanimously, three judges, zero dissents — that states can regulate prediction market platforms the same way they regulate a sportsbook. The panel upheld Nevada gaming regulators' authority over Kalshi, rejecting the company's argument that only the federal government gets a say. That was Friday, August 28th.…
…(cont) On that same Friday, Connecticut's attorney general, William Tong, filed a second lawsuit, accusing Kalshi of running an unlicensed sports betting business behind the label "event contract." Connecticut wants an injunction. Nevada already has a ruling against the company, upheld on appeal. New Jersey, on Wednesday, wants the Supreme Court to weigh in. This is what the industry calls "seeking regulatory clarity" and what the ledger calls a company that lost, got sued again in a second state, and went looking for a court that hasn't ruled yet.
Kalshi's pitch has been that a yes-or-no contract on a football score is a financial derivative, licensed under the Commodity Exchange Act, and therefore exempt from the fifty different state gambling laws that apply to every other sportsbook in the country. The 9th Circuit looked at that pitch and treated it as a sportsbook with better lawyers. Connecticut's suit calls it, in writing, an unlicensed sports betting business. Two states, two legal actions, one appellate ruling on the books — and the company's petition to the Supreme Court marks the first time this dispute has been asked of the justices at all, per the filing itself.
None of this has slowed the trading. NPR puts the prediction market industry at billions of dollars in bets placed across nearly every aspect of modern life — weather, elections, sports, anything with a yes and a no attached. The money moves the same whether the activity is licensed as a derivative or taxed as a wager; what changes is who collects the fee and who answers when a customer loses the rent money on a coin flip dressed up as a contract. New Jersey's petition asks the nation's highest court to settle that question for every state at once. Until it does, the company with the losing record at the 9th Circuit and the open lawsuit in Connecticut keeps taking contracts everywhere else. That is not a loophole closing. That is a company still open for business while the paperwork catches up, hon.
“They call it a "financial derivative" so it doesn't have to follow the rules the sportsbook on the corner follows, and a federal appeals court already looked at that and said it's a sportsbook with a login page. Kalshi lost that fight, got sued again in Connecticut the same week, and now it's asking a different bench for a different answer — that's shopping for a ruling, not seeking clarity. Somebody's rent money is on the other side of that coin flip either way; the only open question is which state gets to tax the loss.”
“Kalshi is a federally regulated exchange operating under the Commodity Exchange Act — this isn't a sportsbook, it's a derivatives market that happens to have a final score attached to a contract. One circuit's ruling doesn't settle a question this size, which is exactly why you take it to the Supreme Court, for national uniformity — wait, did I just call losing at the 9th Circuit "going for uniformity"? That's not — let me start over.”
The receipts
A legal dispute over the future of Kalshi, Polymarket and others has drawn in the Trump administration, the president’s son and nearly every state attorney general.
Connecticut sued prediction market company Kalshi on Thursday, seeking to block the platform from offering sports-based wagers in the state and accusing the company of illegally operating an unlicensed sports betting business. The lawsuit…
New Jersey Attorney General Jennifer Davenport filed a petition with the Supreme Court on Wednesday, asking the justices to determine whether prediction market company Kalshi can offer sports contracts despite state gambling laws. Kalshi, the most popular prediction market in the United States, allows users to place yes-or-no bets on…
The 9th Circuit Court of Appeals ruled Friday that states can regulate prediction market platforms like gambling and sportsbooks, dealing a heavy blow to the industry. In a unanimous ruling, a three-judge panel agreed with a lower court…
If the high court accepts the petition, it would tee up a case with sweeping implications for prediction markets, an industry that has unleashed billions of dollars of betting across nearly every aspect of modern life.
This page is a back-issue: the story as it ran, receipts as they were. The current edition is at the front.