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New Jersey Authorities Meet Deadline to Ask Supreme Court to Review Injunction in Kalshi Lawsuit

Legal Writer

Publish Date: Sep 04, 2026

Fact checked by: Matt Moreno

Key Points

New Jersey Department of Gambling Enforcement Director Mary Jo Flaherty has officially asked the highest court in the US to weigh in on its dispute with Kalshi
The justices may opt to ignore the petition or review the Third Circuit’s affirmation of a lower court’s injunction against Flaherty
The petition focuses on the nature of sports event contracts and state sovereignty over prediction market trading

The anticipated writ of certiorari from the defendants in Kalshi v. Flaherty to the United States Supreme Court has been filed, opening up a new stage of anticipation of a decision from the court on whether it will grant the petition and review the case. At issue is the future of sports event contract trading across the US.

The timing of related court cases couldn’t have been much better for Flaherty and the other defendants, improving the chances that the court will hear the case. If the court passes, the future of sports event contract trading likely shifts to the United States Congress and federal regulators.

Defendants in Kalshi v. Flaherty ask highest court to intervene

The “showdown” that could ultimately determine whether platforms like Kalshi can offer event contract trading on sporting events in states like New Jersey is one step closer to reality. New Jersey Division of Gaming Enforcement (NJDGE) Director Mary Jo Flaherty and NJ Attorney General Jennifer Davenport submitted their request to the Supreme Court on Wednesday.

The writ follows an April opinion from the US Third Circuit Court of Appeals. That ruling affirmed a decision from the US District Court for the District of New Jersey.

That decision held that the US Commodity Exchange Act (CEA) preempts state law in the context of trading upon federally registered designated contract markets (DCMs). The court also ruled that sports event contracts fit the statutory definition of “swaps” under the CEA and the Dodd-Frank Act.

As a result, the court enjoined Davenport, Flaherty, and others from enforcing NJ gambling laws against Kalshi. NJ law states that online sports wagering is illegal in the state unless the party offering the gambling has a license to do so from the NJDGE.

Davenport and Flaherty continue their disagreement with the courts in their petition. A separate federal appellate court has also diverged from the Third Circuit.

(Photo by Samuel Boivin/NurPhoto via Getty Images)

Ninth Circuit decision creates clear split with Third

Flaherty’s timing, or perhaps rather the Ninth Circuit’s timing, almost seems orchestrated to fit a playbook. Just days before Flaherty submitted her petition to the Supreme Court, the Ninth Circuit delivered an opinion that comprised a convincing split with the Third Circuit.

In its ruling in Kalshi v. Assad, a three-judge panel from the Ninth Circuit held that sports event contracts are not covered by the “swaps” provisions in federal laws. It also stated that Nevada authorities are within their rights to enforce their gambling laws against Kalshi within that context.

This development was crucial for Flaherty’s appeal because the Supreme Court only hears a small number of cases each year. One motivating factor behind decisions to review cases is whether disparate courts in the country have issued differing opinions on similar legal questions.

That split is unmistakable given the legal chasm between the Third Circuit’s and Ninth Circuit’s interpretation of the same laws. However, there is still no guarantee that the Supreme Court will take up the case.

Ramifications of Supreme Court passing on Kalshi v. Flaherty

Should the court decline Flaherty’s request, the immediate effect on Kalshi v. Flaherty will be that the injunction will remain in place at least until the Third Circuit rules on the merits of the lawsuit. The long-term impact could be up to other governmental bodies.

However, if the Supreme Court does not involve itself, that will strengthen the CFTC’s prominence in determining what is and is not permissible on exchanges. It will also mean that parties looking to limit those offerings could put more pressure on Congress to enact clarifying legislation.

It’s true that the Supreme Court could still take up similar cases even if it passes on this petition. There are ongoing lawsuits related to prediction market exchanges in numerous other states at this time.

Flaherty’s petition is undoubtedly the court’s first opportunity to either consider the issues or pass on involvement. With the writ available, all eyes will now be on the court docket.

Want to stay updated on the latest developments? Head over to our Ballislife Play page.

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