A group of 39 state attorneys general and the Native American tribe whose litigation helped create the framework for tribal gaming are among those urging the Supreme Court to hear New Jersey’s appeal of its lawsuit against Kalshi.
Also submitting amicus briefs are a global collection of gaming regulators and three nonprofits that argue the Kalshi case is an opportunity to review the 2018 decision to legalize sports betting.
The briefs were filed after New Jersey submitted a petition for certiorari last month, asking the Supreme Court to hear the case. That petition followed the Third Circuit Court of Appeals’ decision to grant Kalshi an injunction that prevents New Jersey from enforcing its sports betting laws against the business.
Attorneys general sign amicus
On Wednesday, a group of attorneys general from 39 states plus the District of Columbia, led by Ohio Attorney General Andrew Wilson, submitted an amicus brief to the Supreme Court, asking it to take on the case and overturn the Third Circuit’s decision.
20261007134816267_Kalshi-Cert-AmicusThe states whose attorneys general did not sign the amicus were Alaska, Florida, Georgia, Indiana, Kentucky, Montana, North Dakota, Tennessee, Texas, and Washington. Out of those states, all but Washington — which has already banned Kalshi’s sports contracts — have a Republican attorney general.
The Sixth Circuit in late September ruled that Tennessee and Ohio could enforce their gambling laws on Kalshi and other prediction markets, and Washington already has a court order allowing it to ban sports event contracts. The state of Montana and Kalshi mutually agreed to drop their case.
“Waiting too long to address this issue will permit the federal-state regulatory dispute to escalate,” the brief said. “The ongoing power struggle between the States and the CFTC highlights the unpredictability about what law applies — and to whom.
“Whether in this case, or in one of the many more cases sure to come, this Court should step in, resolve the circuit split, provide guidance to lower courts, clarify the CFTC’s authority, and provide the badly needed answer to the Question Presented.”
The Commodity Futures Trading Commission (CFTC) is the federal agency that regulates prediction markets.
The attorneys general argued that Kalshi’s claim that state sports betting laws are preempted by the Commodity Exchange Act is mistaken.
“The prediction markets are wrong,’ the brief said. “They cannot strip the States of their core sovereign power through relabeling and window-dressing. Our constitutional structure is much more durable than that. And the promise of federalism ensures that States do not lose their ability to protect their citizens so easily. “
They added that they have the means and experience to regulate sports betting in a way that the CFTC does not.
“The States have developed, from their long experience as gambling regulators, comprehensive regulations designed to protect their citizens and ensure a functioning market,” they added in the brief. “States prevent minors from betting, create exclusion lists to assist gambling addicts, apply consumer protections to prevent unfair practices and protect the integrity of sports, limit gambling spending, and more. As the CFTC acknowledged just two years ago, States possess the ‘particular expertise’ to ‘address[] particular risks and concerns associated with gambling.’”
‘Circuits are fractured’
The state attorneys general also noted the level of difference between rulings from district and circuit courts across the country. Even court rulings that ended with the same result have often found different reasons for doing so. For example, the Ninth Circuit found that state laws are preempted by the Commodity Exchange Act, but that this does not matter for sports event contracts because they are not swaps. On the other hand, the U.S. District Court for the District of Maryland found that state law is not preempted.
“The circuits are fractured,” reads the brief. “And they are not split only on outcome. They are divided on all possible modes of analysis. One (the Third) says sports bets are swaps and preemption applies. Another (the Ninth) says the CEA contains an express-preemption provision, but it does not cover sports bets because they are not swaps. And the last (the Sixth) says sports bets are not swaps and the CEA would not result in preemption in any event.
“The resulting nationwide confusion should be put to an end. This Court should grant the petition.”
Joint brief asks court to reexamine Murphy
Also submitting a brief Wednesday were Stop Predatory Gambling, the Association of American Physicians and Surgeons, and Texans Against Gambling. The three groups submitted a single joint brief.
They wrote that Kalshi “brazenly circumvents state regulations and prohibitions in order to promote the equivalent of sports gambling on everyone’s handheld cell phone, by reinterpreting an old statute that cannot plausibly be read to federalize sports gambling.”
These organizations, which liken sports betting to the opioid crisis, called for the Supreme Court to go a step further when taking up the Kalshi case, and use the case as an opportunity to review its decision in Murphy v. NCAA, which allowed states to legalize sports betting.
20261007114656655_SPG-AAPS-TAG-amicus-brief-26-299The three bodies argued that the Murphy decision was “not based on the Constitution, but rather on a much-criticized non-severability analysis that did not benefit from complete briefing, and which did not fully consider the immensely harmful consequences.”
The “non-severability analysis” referred to here is the court’s decision to strike down the Professional and Amateur Sports Protection Act (PASPA) entirely after determining that part of the law violates the anti-commandeering doctrine. When part of a law is determined to be invalid, the court then must determine whether it is severable from the rest of the law. If the court deems it is not, the whole law becomes invalid.
Stop Predatory Gambling, the Association of American Physicians and Surgeons, and Texans Against Gambling argue that the court instead should have struck down the part of PASPA that prohibits states from authorizing sports betting, but kept the language prohibiting the “operating, advertising, or promoting” of sports betting. Had it done so, sports betting would still be illegal in most of the country.
Brief: Kalshi case makes Murphy decision relevant
The brief argues that the rise of prediction markets has made this non-severability decision relevant, which is why it argues the Supreme Court should use the Kalshi case to reexamine it.
Ordinarily, a clause banning states from legalizing sports betting and a clause banning the operation of sports betting would do the exact same thing. But if a federally regulated exchange tries to offer sports betting, the state provision would not apply, but the ban on operation would still be relevant. If the two clauses do not do the same thing, the brief argues, they should be able to be severed from one another.
“Kalshi and other commercial purveyors of sports gambling lack the political accountability that state government has, which would provide a check against predatory practices,” the brief says. “So it makes perfect sense for Congress to have separately prohibited private commercialized gambling on sports, and this Court should use this case to address Murphy’s severability analysis that invalidated the commercial ban.”
The organizations also argued that recent precedents have made the court’s decision on severability with regards to PASPA an “anomaly.”
Cabazon tribe says key ruling ‘under threat’
The two new briefs followed one submitted Oct. 2 by the Cabazon Band of Cahuilla Indians.
20261006103043089_Amicus-Curiae-BriefThe Cabazon, based in California, argued that the Third Circuit’s decision “has the potential to cause devastating harm to the economies of hundreds of Indian tribes throughout the U.S.”
The Cabazon were a party in the 1987 Supreme Court case California v. Cabazon Band of Mission Indians (the tribe changed its name in 2015), a pivotal case in the history of tribal gaming.
The Supreme Court determined that California had no right to regulate or prohibit bingo or card games hosted by the Cabazon on the tribe’s land. The ruling enshrined the legal status of tribal gaming nationwide and led to Congress passing the Indian Gaming Regulatory Act (IGRA).
“The long-term impact of the Cabazon decision in Indian Country throughout the United States cannot be overstated,” the tribe wrote in its amicus brief. “Respected commentators have said that Cabazon ‘may be the most momentous decision in federal Indian law in the last 50 years.’”
“But that legacy is now under direct threat from Respondent Kalshi and its prediction market cohorts.”
The tribe said that besides the arguments advanced by New Jersey about its ability to enforce its own state laws, the case raises concerns about issues of tribal sovereignty.
“In addition to the state law-based reasons and concerns advanced by Petitioners, exceptionally important federal Indian law and tribal law principles and considerations are at issue here,” tribal lawyers wrote.
Tribal, state cases treated separately so far
Thus far, Kalshi’s lawsuits against tribes and states have been separate, even when the same court, such as the U.S. Court of Appeals for the Ninth Circuit, has considered both.
The cases have some overlapping elements, as in each case Kalshi argues that the CFTC’s “exclusive jurisdiction” over swaps supersedes other laws. However, the state lawsuits deal with interaction between federal and state law, while the tribal lawsuits deal with interactions between two federal laws — the CEA and IGRA.
If the Supreme Court takes up a prediction market case, it may choose to combine tribal and state lawsuits in order to offer a single ruling on the status of sports event contracts.
The Cabazon attached an appendix to its brief, showing that its members were able to place sports bets on Kalshi while on Cabazon land, which the tribe argues is in violation of its gaming ordinances, its tribal compact with California, and IGRA.
“The unlawful sports betting activities that Kalshi is engaged in on the Cabazon Reservation are being conducted on hundreds of other Indian reservations around the country, as many additional tribes and tribal organizations can and will attest to this Court,” the Cabazon brief said.
Regulatory groups call out inconsistencies
Also submitting an amicus brief on Oct. 2 were the International Association of Gaming Regulators, which represents gaming regulators across the globe, and the North American Gaming Regulators Association, made up of regulators in the U.S. and Canada, including state and tribal bodies.
20261002172612208_397111_Brief-of-AmiciThe regulators’ associations wrote that it would create problems if its members were supposed to treat some bets on an event as illegal or only permissible if licensed, while other bets on the exact same event were permitted under the CFTC.
“The Associations’ members are unable to consistently explain to their licensees why, or if, a wager that is subject to comprehensive regulation when accepted by the licensee may be offered to the same patron, on the same event, free of those requirements by an exchange,” they wrote. “Nor can they consistently explain to the public why, or if, a product they would treat as unlawful if offered by an unlicensed website may be lawful when offered through an exchange registered with the CFTC.”
Like the Cabazon, the two regulatory associations also pointed to the questions of tribal law raised by sports event contracts. Their brief noted that the Ninth Circuit ruled last month in a case brought by California’s Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians that sports event contracts “are likely not swaps under the CEA.”
“The Associations do not ask this Court to resolve the merits of these holdings at this stage. Blue Lake Rancheria is significant for a narrower reason: it demonstrates that the conflict with the Third Circuit is not confined to a single State’s statute or a single form of regulation,” the associations wrote.
Kalshi has another month to respond
Kalshi has yet to respond to New Jersey’s petition and does not need to until Nov. 9. The initial deadline for Kalshi to respond was Oct. 8, but the court approved a motion to extend on Sept. 22.
It is unlikely that the Supreme Court will consider taking up the case until Kalshi’s response is in. The court may also ask the U.S. solicitor general to weigh in on whether or not to take the case, which could push things back further.
