The Kalshi Supreme Court petition filed by New Jersey on 2 September 2026 marks the first time either side of the sprawling legal dispute has asked the justices to intervene, and it arrives with a deliberate circuit split now on the record.
The trigger was the Ninth Circuit’s unanimous ruling on 28 August, in which a three-judge panel concluded that Kalshi’s sports event contracts are not swaps under the Commodity Exchange Act (CEA) and that Nevada can therefore enforce its gaming law against the company. That directly contradicts the Third Circuit’s April finding, which held 2-1 that the CEA likely preempts state gambling law for such contracts traded on a exchange licensed by the Commodity Futures Trading Commission (CFTC, the US derivatives regulator).
Why New Jersey Waited for the Ninth Circuit
New Jersey Attorney General Jennifer Davenport’s office had been patient by design. In June, it asked Justice Samuel Alito to extend the filing deadline, arguing that pending rulings from the Fourth or Ninth Circuits, or from the Massachusetts Supreme Judicial Court, ‘would inform both the petition and this Court as to the presence of a split.’ Justice Alito first extended the deadline to 4 August 2026, then on 24 July 2026 extended it again to 3 September 2026, according to the Supreme Court docket filing.
The Ninth Circuit delivered exactly the split New Jersey needed. Writing for a unanimous panel that also included Judges Bridget S. Bade and Kenneth K. Lee, Judge Ryan Nelson said that classifying Kalshi’s sports contracts as swaps ‘does not square with the statutory scheme’ and ‘would raise concerns under the major-questions doctrine.’ The ruling, in the case formally titled KalshiEX, LLC v. Assad, upheld a lower-court decision dissolving an injunction that had let Kalshi keep operating in Nevada, according to Reuters.
Nelson was pointed about what he saw as Kalshi’s framing. Bloomberg Law quotes him writing: ‘For Kalshi to deny that its sports event contracts are sports bets under a reasonable person’s understanding is disingenuous. That sports event contracts are, in reality, sports bets is not just an “I know it when I see it.” Rather, everyone, including Kalshi, knows it when they see it.’ He added: ‘The CFTC is not a national gambling regulator. No one suggested it was until over a decade after the law was passed.’
The Kalshi Supreme Court Petition and What It Is Asking
New Jersey’s petition asks the justices to review the Third Circuit’s decision, formally cited as KalshiEX, LLC v. Flaherty, 172 F.4th 220. That ruling found two independent bases for preemption: field preemption and conflict preemption, according to Skadden. Field preemption means federal law occupies the entire regulatory space; conflict preemption means state law directly obstructs federal rules. Either, the Third Circuit held, was enough to shield Kalshi from New Jersey’s gambling law.
Davenport’s statement was blunt: ‘These companies have no right to offer their sports bets without following state law, which is why dozens of states across the ideological spectrum have opposed them.’ States opposing Kalshi argue, among other things, that the company operates without required state licences, including in violation of restrictions on wagers by those under 21, according to Reuters.
New Jersey is not alone in petitioning. Crypto.com and Robinhood, whose Ninth Circuit cases were decided on the same date as Kalshi’s, have also filed certiorari petitions, bringing the total before the Court to three, according to Withers Worldwide. The Ninth Circuit’s opinion in KalshiEX v. Assad also returned the question of Kalshi’s election contracts to the lower court for separate review, with Nelson describing them as a ‘much smaller part of Kalshi’s business.’
Where the Cases Stand Now
Three more federal circuits are yet to rule. The Fourth Circuit heard Maryland’s appeal on 7 May. The Sixth Circuit heard consolidated appeals from Ohio and Tennessee on 30 July. The Second Circuit is weighing appeals from both New York and Connecticut, where a referral to a three-judge panel is under way. Any of these could narrow the split or widen it.
On the ground, the patchwork is already messy. Nevada, Michigan and Washington have court orders restricting Kalshi’s activity. New Jersey remains open to it under the Third Circuit’s ruling. Massachusetts has a stayed injunction awaiting its own Supreme Judicial Court. The CFTC has backed Kalshi throughout: in August it used emergency authority under the CEA to keep Kalshi’s exchange open despite New York’s attempt to shut it down over a separate $36 billion lawsuit. A CFTC spokesperson called the Ninth Circuit ruling one that has ‘teed up a circuit split that calls out for resolution by the Supreme Court.’
Kalshi itself, valued at $22 billion in a recent funding round, says it is seeking further review. ‘Despite the Ninth Circuit’s opinion, we still believe the CFTC regulations as written do not prohibit sports contracts, and in any event, the CFTC is working to clarify those regulations,’ spokesperson Dani Lever said.
Kalshi’s response to New Jersey’s petition is due within 30 days. The justices are under no obligation to take the case, and a ruling, if they do, would not arrive before their next term. Until then, operators face a state-by-state compliance map rather than a single federal answer, and the picture could shift again before the Court decides whether to step in.
