Supreme Court asked to settle $53bn-a-month prediction markets fight

New Jersey wants the justices to decide if prediction contracts are derivatives or gambling, after rival rulings from the Third, Sixth & Ninth Circuits.

The hit

New Jersey has asked the US Supreme Court to settle whether sports-related prediction contracts are federally regulated derivatives or state-regulated gambling, according to JD Supra. The petition follows the Third Circuit’s April 6 ruling for Kalshi in KalshiEx LLC v. Flaherty, now contradicted by two other circuits.

Why it matters

A reversal wouldn’t shut Kalshi down, it would hand oversight to 50 state regulators. States that already regulate sports betting wouldn’t need to build a regulatory apparatus from scratch, according to Forbes, but each would still decide licensing, tax & consumer-protection rules for exchange-style platforms. Traders watch this because it reshapes who sets the rules for exchange-style betting, & whether fee revenue gets taxed like a sportsbook’s hold or something thinner.

The record

NJ cert petition filed	2 September 2026 (New Jersey)
Third Circuit ruling for Kalshi	6 April 2026, KalshiEx LLC v. Flaherty
Sixth Circuit ruling against Kalshi	25 September 2026, Kalshi v. Schuler
Ninth Circuit ruling against Kalshi	28 August 2026, Kalshi v. Assad
Monthly trading volume, all prediction markets	$53bn (Forbes)
North Carolina exchange fee tax	6% of net trading fee revenue, enacted in 2026 budget

What happens next

Watch whether the Supreme Court agrees to hear the New Jersey case, & how the deepening circuit split pushes the justices to act.

Sources: Prediction Markets Hit $53 Billion A Month. Courts Can’t Agree If They’re Derivatives Or Bets · What’s Next For Prediction Markets If…

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