New Jersey Asks Supreme Court to Settle Kalshi Sports-Contract Fight
NJ petitions SCOTUS as courts split on Kalshi; Michigan tightens its ban, and the NFL presses exchanges over player-injury markets.
This article was produced with AI assistance and edited by the ON360 newsroom.
New Jersey has asked the U.S. Supreme Court to decide whether states can enforce their gambling laws against sports event contracts offered on Kalshi, a federally regulated prediction market exchange, according to Gambling Insider. The petition follows a split among U.S. appeals courts over whether Kalshi’s sports contracts count as swaps beyond state reach.
The Third Circuit ruled 2-1 in April that federal law preempts New Jersey’s gambling rules for Kalshi’s contracts. The Ninth Circuit went the other way in a Nevada case decided Aug. 28, rejecting Kalshi’s swaps argument outright. There is no guarantee the Supreme Court will take the case; some analysts expect it to wait for more appellate rulings first.
Michigan tightens its Kalshi ban
A Michigan judge granted a preliminary injunction on Sept. 1 extending restrictions on Kalshi’s sports event contracts in the state. The order builds on a temporary restraining order issued in June. Kalshi must now use a Michigan Gaming Control Board-licensed geolocation provider to block in-state access, or face a penalty of $500,000 per day.
The Ninth Circuit’s Nevada decision is already rippling through other cases. Ohio, Iowa and Utah cited it as supplemental authority this week, following similar filings from Rhode Island and Illinois. Elsewhere, a Novig lawsuit against New Mexico has been stayed until Aug. 13, 2027, letting the operator run there for another year, while a separate Novig case against Massachusetts remains paused pending a state Supreme Judicial Court ruling on Kalshi’s own appeal.
Kalshi drops odds format and injury markets
Kalshi made two changes this week under pressure from the Commodity Futures Trading Commission. It stopped displaying American-style plus-minus odds, following regulator guidance that sportsbook-style pricing could mislead users about how event contracts work. Prices now appear only in cents, percentages or multipliers, a format other exchanges have also adopted.
Kalshi also pulled contracts tied to athlete injuries, including markets on how long players would be sidelined and whether specific NFL athletes would suit up for Week 1. The move followed a direct request from the CFTC.
NFL wants more contracts gone
The NFL renewed pressure on exchanges ahead of the 2026 season. Chief Compliance Officer Sabrina Perel wrote that it remains “deeply concerning” that contract categories the league flagged in March are still trading. The league objects to contracts on injuries, misconduct, officiating, roster moves, broadcast mentions and celebrity attendance, arguing these outcomes are too easily known in advance or open to manipulation.
Canadian regulators have so far kept prediction markets separate from licensed sports betting products, drawing a firmer line between commodity-style contracts and wagering. That distinction matters for Ontario bettors weighing exchange-style platforms against AGCO-regulated operators, which are required to offer deposit limits, self-exclusion and other player-protection tools.
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For now, the split among circuit courts leaves Kalshi operating under different rules from state to state. A Supreme Court decision on whether to hear New Jersey’s petition could come later this year.