A bipartisan coalition of attorneys general from 39 states and Washington, D.C., has filed an amicus brief urging the U.S. Supreme Court to hear New Jersey’s challenge to prediction markets like Kalshi and Polymarket. The coalition argues these platforms should be subject to state gambling laws rather than solely federal oversight.
The coalition filed the amicus brief on Wednesday, POLITICO reported on October 7, 2026. The case centers on whether states can regulate prediction markets under their gambling laws. New Jersey is seeking to overturn an appellate court ruling from earlier this year that found federal commodity trading law preempted the state’s gambling regulations.
States Call for Supreme Court Intervention
The amicus brief argued that lower courts have produced conflicting rulings on the issue. “[This dispute] has splintered the circuits and lower courts with no resolution on the horizon. Only this Court can provide the much needed answer. It should do so,” the state attorneys general wrote in the brief, according to POLITICO.
The filing represents a rare show of unity between Republican- and Democratic-led states. Both sides are pushing back against an industry backed by Silicon Valley investors and President Donald Trump.
The Core Legal Dispute
The states argue prediction markets should fall under state gambling laws, including those governing sports betting. The markets counter that they operate as federally regulated exchanges and should answer only to federal authorities.
In the amicus brief, the attorneys general took aim at the markets’ legal reasoning. The prediction markets “claim to have discovered this no-state-law-applies escape hatch buried within a subsection of a section of a federal financial reform bill passed in the wake of the 2008 mortgage crisis,” the brief stated, as reported by POLITICO. “The prediction markets are wrong. They cannot strip the States of their core sovereign power through relabeling and window-dressing.”
Federal Stance Favors Prediction Markets
The Trump administration has broadly supported the expansion of prediction markets, POLITICO reported. The Commodity Futures Trading Commission, led by Trump appointee Michael Selig, has argued it should serve as the industry’s sole regulator.
Americans have increasingly used platforms like Kalshi and Polymarket to place bets on sports, politics and cultural events, according to the report.
Uncertain Path Forward
Whether the Supreme Court will agree to hear the case remains unclear. The petition arrives after judges in Nevada and Washington ruled against Kalshi, and several other cases are still awaiting decisions, POLITICO reported.
The outcome could set a significant precedent for how prediction markets are regulated across the country. It will determine whether individual states retain the authority to apply their gambling laws or whether federal oversight alone governs the industry.
