New Jersey Asks Supreme Court to Rule on Kalshi Preemption

New Jersey has asked the Supreme Court to decide whether the 2010 Dodd-Frank Act took away the states' power to police sports bets sold on federally registered markets. The petition was filed on September 2, 2026, docketed as No. 26-299 on September 8, and Kalshi's response is due October 8.

The filing is two weeks old and we are late to it; what makes it worth reading today is that the response clock is now the next thing on the docket, and litigants have started citing the petition to put other cases on hold. We pulled the docket file, dated September 15, and the 332-page petition off supremecourt.gov this morning and read them, which is how we check everything we publish.

Nothing about this changes what a sweepstakes player can do today. No sweepstakes brand is a party, no coin balance is affected, and the petition is at the earliest stage a Supreme Court case has. It matters here for one reason: the authority New Jersey is defending is the same authority that eleven states have used to switch sweepstakes casinos off inside their borders. If that authority loses, the reasoning travels.

What exactly did New Jersey ask?

One sentence, printed on page (i) of the petition:

Whether the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act preempted States from regulating sports bets that occur within their jurisdictions if those bets are offered on markets registered with the Commodity Futures Trading Commission.

The petitioners are Mary Jo Flaherty, interim director of the New Jersey Division of Gaming Enforcement, and state Attorney General Jennifer Davenport. The respondent is KalshiEX, LLC. Solicitor General Jeremy M. Feigenbaum is counsel of record. The case they are appealing is KalshiEX, LLC v. Flaherty, decided by the Third Circuit on April 6, 2026, and the docket records two extensions granted by Justice Alito, which pushed the filing deadline from July 5 to September 3.

Why do two federal appeals courts give opposite answers?

Because they read the word "swap" differently, and both said so about the other.

Read the word "likely" in that table literally. All three rulings are preliminary-injunction decisions about who is likely to win, not final judgments, and the Third Circuit panel said so of its own. Nor is the Ninth Circuit's the last word in its own court yet: Kalshi petitioned for panel rehearing and rehearing en banc on September 9, so the mandate has not issued.

The Ninth Circuit decision came out of Nevada, and we covered it when the panel upheld the dissolution of Kalshi's injunction three weeks ago. The petition says that opinion "mentioned the Third Circuit's opinion over 20 times while disputing its conclusion, interpretation, and methodology", and quotes the line that does the work: "The Dodd-Frank Wall Street Reform Act cannot be read as a direct (or indirect) regulation of sports gambling."

New Jersey's own count of the wider fight, in a footnote that lists each case by number: "at least 39 lawsuits across 20 States". Below the circuit level it puts the score at "over 20 decisions", divided "by an 18-4 ratio", with the majority rejecting the Third Circuit's approach. Those are the petitioner's figures, not ours, and a respondent's brief may dispute them.

Does this touch sweepstakes casinos at all?

Not directly, and the petition never uses the word sweepstakes. The connection is the principle underneath.

New Jersey's argument for why the case matters rests on states' police power over gambling, citing a 1905 Supreme Court case for the proposition that gaming regulation lies "within the police powers of a state" and Murphy for the point that states are "free to act" on sports gambling. That is the same power behind every sweepstakes ban on our map, from Connecticut to Montana. A ruling that a federal financial statute quietly overrode it would be read closely by every operator arguing that its product is not gambling either.

The petition also spells out a consequence for conventional casinos that is easy to miss. If sports bets are swaps under the Commodity Exchange Act, then the statute's rule that swaps must be entered into on a designated contract market would mean, in the Ninth Circuit's words quoted at page 18, that "every person placing a sports bet at Caesar's Sportsbook (or anywhere else for that matter) is violating the" Act. The petition makes the same point again at page 22, and spells out the consequence it wants the Court to notice: that federal courts would be "render[ing] all classic sportsbooks unlawful".

What happens next, and when?

Four votes are needed to grant review. Most petitions are denied, so the base rate here is against a hearing, and neither a grant nor a denial would decide the merits by itself.

The question is moving in the lower courts at the same time. A Wisconsin judge stayed the Ho-Chunk Nation's case on September 11 and certified it for the Seventh Circuit, and the Ninth Circuit held on September 16 that Kalshi's contracts are class III gaming on tribal land. The petition itself is already being used as a reason to stop other cases: in a private gambling-loss suit against Kalshi in Illinois, a plaintiff filed a motion on September 16 asking the court to freeze proceedings until the Seventh Circuit and the Supreme Court have dealt with this question.

If you are deciding where to spend money this month, none of it is a reason to change anything. The practical checks stay the same ones: whether a brand accepts players in your state, what its own rules say about redeeming there, and what it publishes in writing. Our state legality guide and the brands we rank both set out the documents we could actually read.

Sources & documents

• Supreme Court docket for No. 26-299, Flaherty v. KalshiEX, LLC - the filing and docketing dates, the October 8 response deadline and the two extensions, read from the Court's own docket file dated September 15, 2026
• Petition for a writ of certiorari - 332 pages with appendix; the question presented, the circuit-split section and every figure quoted above
• Plaintiff's motion to stay in Lavery v. Kalshi Inc., N.D. Ill. - the September 16 filing that cites this petition as a reason to pause a separate case
• Docket in Lavery v. Kalshi Inc., No. 1:25-cv-14184 - where that motion was entered
• Docket in KalshiEX, LLC v. Assad, No. 25-7516 (9th Cir.) - the September 9, 2026 petition for panel rehearing and rehearing en banc, entry 206, first reported in our own coverage of that decision

21+ only. Nothing above is legal advice, and no court has ruled on whether any sweepstakes casino is lawful in your state. If gambling stops being fun, call 1-800-GAMBLER or read our responsible gaming resources.