Multiple Industry Stakeholders Back New Jersey in Kalshi Legal Battle
Multiple amicus briefs were filed this week in support of New Jersey's suit against Kalshi, the New York prediction market operator already doing business in the state under a preliminary injunction. The injunction was obtained after Kalshi contested a cease-and-desist order from New Jersey regulators in March.
The remarks are made by a range of stakeholders, including a coalition of anti-gambling organizations, one group of tribal groups, 34 state attorneys general, as well as the D.C. attorney general, the Northern Mariana Islands, and the American Gaming Association (AGA).
The coalition of anti-gambling organizations, Stop Predatory Gambling, Texans Against Gambling, and the Association of American Physicians and Surgeons, described Kalshi's business as threatening public health. Legalizing the sites without rigorous state control, they argue, would create significant risks for problem gamblers, and they criticized the lower court for failing to balance those risks fully before issuing the injunction.
In a more comprehensive filing, 34 attorneys general joined New Jersey's brief, invoking states' sovereign prerogative to regulate gambling on their soil. The attorneys general of Nevada and Ohio spearheaded the brief, which represents states with varying gambling laws.
The group invoked the 2018 repeal of PASPA as precedent for state authority and warned that federal overreach in Kalshi's activities threatens this autonomy. Kalshi is approved to operate by the Commodity Futures Trading Commission (CFTC), which has consistently stated that it overrides any state laws.
Tribal gaming interests are also entering the legal debate of prediction markets for the first time. The tribal brief speaks on behalf of 60 individual tribes and various national and regional associations.
They asserted that Kalshi's business defies tribal sovereignty and compact exclusivity for Class III gaming. The filing follows a failed May meeting with acting CFTC Chair Caroline Pham and a history of public statements opposing prediction markets.
CANJ Also Participating
The New Jersey Casino Association (CANJ) also submitted an amicus brief. The group, representing the nine Atlantic City casinos, focused on the competitive and regulatory dangers that Kalshi poses.
CANJ argued that allowing Kalshi to provide its product without a gaming license circumvents New Jersey law and can effectively enable federal authorities to undercut licensed casinos. The company described Kalshi's trades as de facto sports wagers disguised under the guise of commodity trading.
The AGA's petition expressed these same concerns. It opposed the CFTC's jurisdiction over sports-betting markets and promoted federal regulation as an adjunct to, not a replacement for, state regulation.
The gaming sector highlighted potential for market disruption and a patchwork of regulation if Kalshi and similar entities are allowed to bypass state systems.
This is the first prediction market case to reach an appeals court since the CFTC dropped an appeal of an election betting case last year, and the ruling has significant implications for the regulatory future of event-based financial contracts.
