New Jersey has petitioned the Supreme Court to overturn a lower court ruling that allows Kalshi to offer sports bets on federal exchanges despite state prohibitions. The core issue centers on the 2010 Dodd-Frank Wall Street Reform Act's preemption of state laws. New Jersey argues that if Kalshi prevails, companies can ignore all state sports-gambling statutes by simply registering with the Commodity Futures Trading Commission (CFTC).

The legal question hinges on whether athletic contests qualify as 'swaps' under federal law, which the Dodd-Frank Act defines as agreements dependent on events with potential financial consequences. The Third Circuit ruled that sports outcomes clearly have such consequences, affecting stakeholders including sponsors, advertisers, and networks. The Trump administration supports Kalshi, with Donald Trump Jr. as an advisor and investor.

However, the conservative Supreme Court majority isn't guaranteed to side with Kalshi, as three Trump-appointed 9th Circuit judges previously ruled against the company.