- New Jersey has until Sept. 3 to ask the Supreme Court to review the Third Circuit ruling protecting Kalshi’s sports contracts.
- Justice Samuel Alito twice extended New Jersey’s time to file, moving the deadline from July 5 to Sept. 3.
- The Ninth Circuit’s Aug. 28 ruling for Nevada split the appeals courts on whether states can police sports-event contracts.
- Nevada’s governor and gaming regulators applauded the decision, while Kalshi board member Brian Quintenz said it provided more confusion than clarity.
WASHINGTON – New Jersey has until Sept. 3 to ask the U.S. Supreme Court to review the appeals ruling that shields Kalshi’s sports-event contracts from state gambling law. The deadline now falls days after a second federal appeals court reached the opposite conclusion and split the circuits.
The question the justices would face decides which regulator polices sports-event contracts: state gaming commissions, which license online gambling sites for USA players, or the Commodity Futures Trading Commission, which registered Kalshi as a federal exchange.
Two Extensions Put New Jersey’s Deadline At Sept. 3
The Third Circuit ruled 2-1 in April that Kalshi was likely to prevail against New Jersey’s cease-and-desist order because its sports-event contracts are swaps traded on a CFTC-designated exchange, placing them under the agency’s exclusive jurisdiction. That decision, in Kalshi’s case against New Jersey Division of Gaming Enforcement Interim Director Mary Jo Flaherty, left the state’s petition for review as the most direct route to the high court.
New Jersey’s original filing deadline was July 5, according to the Supreme Court’s docket in Flaherty v. KalshiEX. Alito extended it to Aug. 4 on July 1, then granted a second application on July 24 extending the time to Sept. 3. The state’s application argued that the Third Circuit’s reading of federal law would federalize a multibillion-dollar sports-wagering industry.
The Ruling That Split The Circuits
The Ninth Circuit handed New Jersey its strongest argument on Aug. 28, ruling 3-0 that Nevada can enforce its gambling laws against the same contracts. The panel held that sports-event contracts are likely not swaps under federal law when it backed Nevada’s ban on Kalshi sports contracts. Two federal appeals courts now read the same statute in opposite ways, the conflict the Supreme Court most reliably steps in to resolve.
Nevada Calls The Ruling Vindication
Nevada’s regulators treated the decision as a complete victory the day it landed. “This completely vindicates what we have been saying all along. This is sports betting and needs to be properly regulated by the state,” Nevada Gaming Control Board Chairman Mike Dreitzer said in the Board’s Aug. 28 release, which notes the ruling reaches sports-event contracts offered by Kalshi, Crypto.com and Robinhood.
Gov. Joe Lombardo said in the same release that prediction markets offering sports-event contracts “constitute gambling and must comply with Nevada’s gaming laws and regulatory framework,” and commended the Board for its enforcement work. The Board said it considers the contracts wagering activity under NRS 463.0193 and 463.01962 and has determined Kalshi’s operations are unlawful in the state.
Kalshi Sees Confusion As States Keep Filing
Brian Quintenz, a Kalshi board member and former CFTC commissioner, said in a Bloomberg Television interview Aug. 31 that the Ninth Circuit’s opinion provided “more confusion than clarity” for the company and its customers.
The state-court pressure has not waited for the justices. Connecticut Attorney General William Tong filed suit on Aug. 26 accusing the exchange of running unlicensed sports betting, a case detailed when Connecticut sued Kalshi over illegal sports bets, and it joined New York, Baltimore and other jurisdictions already litigating against the platform.
New Jersey’s petition is due Thursday.