New Jersey AG Petitions Supreme Court on Prediction Market Jurisdiction
The petition forces a federalism question that federal courts have so far resolved in favor of national regulators, and a SCOTUS grant would determine whether states can independently restrict or...
New Jersey Attorney General Jennifer Davenport filed a petition with the U.S. Supreme Court on September 2, 2026, asking the Court to review a lower court ruling that prediction markets such as Kalshi and Polymarket fall exclusively under federal regulatory jurisdiction, according to a New York Post report citing the filing.
The central legal question in the petition is whether states retain independent authority to regulate or prohibit prediction market platforms, or whether federal oversight by the Commodity Futures Trading Commission (CFTC) preempts state action. The lower court ruled that federal jurisdiction controls, a conclusion Davenport is now asking the Supreme Court to revisit.
Prediction markets allow users to trade contracts tied to the outcome of real-world events, including elections, economic data releases, and legislation. Kalshi, headquartered in New York, received CFTC approval to list event contracts in 2023 after a multi-year regulatory dispute. Polymarket, which operates offshore and is accessible to U.S. Users through cryptocurrency wallets, has operated in a more ambiguous regulatory space. Neither company has been charged with a federal violation as of the date of this article.
The CFTC's authority over event contracts derives from the Commodity Exchange Act (CEA), which grants the agency jurisdiction over contracts involving commodities and certain financial instruments. In 2023, the CFTC formally approved Kalshi's election contracts after the agency's own internal review, a decision that was itself subject to federal court litigation before Kalshi prevailed.
New Jersey's position, as quoted in the New York Post report, is that the Supreme Court should "resolve this issue and recognize" state authority in this area. The specific legal theory underlying the petition, including the provision of federal or state law Davenport argues permits concurrent state jurisdiction, is not fully detailed in the available source material. The full text of the petition, which would contain the complete legal argument, is a public document filed with the Supreme Court clerk and would provide that detail.
The federalism dimension of the case carries implications beyond New Jersey. If the Supreme Court grants certiorari and rules in favor of state authority, other states could move to restrict or ban prediction market platforms operating within their borders, even if those platforms hold federal approval. If the Court declines to hear the case or affirms federal preemption, state-level efforts to regulate the industry would face a significant legal barrier.
At least one other state, Illinois, has previously raised questions about prediction market regulation through its own gaming control apparatus, though no comparable Supreme Court petition from Illinois has been reported as of this date. Whether additional state attorneys general have filed or plan to file amicus briefs in support of New Jersey's petition is unknown. Those filings, if submitted, would appear in the Supreme Court docket under the case number assigned to Davenport's petition.
The prediction market industry has grown in volume and visibility ahead of the 2026 midterm election cycle. Specific revenue or trading volume figures for Kalshi or Polymarket in 2026 are not available in the source material. Financial disclosures or SEC-equivalent filings, to the extent they exist for these platforms, would be the relevant documents to establish that data.
Congress has not passed legislation explicitly preempting state regulation of prediction markets, nor has it enacted a statute expressly authorizing state concurrent jurisdiction. The regulatory framework rests on CFTC rulemaking and judicial interpretation of the CEA. Whether any federal legislation on the subject is currently pending in committee is not reflected in the available source material. The congressional record and committee schedules published by the House Agriculture Committee and Senate Agriculture Committee, which have jurisdiction over CFTC matters, would show any such activity.
The Supreme Court has not previously issued a ruling specifically addressing prediction market jurisdiction, which is the basis for Davenport's argument that the Court's review is warranted. Whether four justices will vote to grant certiorari is unknown. The Court's conference schedule and any subsequent order list will be the public record that answers that question.