39 States Urge Supreme Court to Review Kalshi Dispute
Ohio and 38 other states, along with Washington, D.C., have asked the U.S. Supreme Court to settle whether a federal law shields Kalshi's sports-event contracts from state gambling rules.
The states filed their amicus brief on October 7, 2026, backing New Jersey's petition for certiorari in Flaherty v. KalshiEX, LLC, No. 26-299, now before the Supreme Court. At issue is whether Kalshi's sports-event contracts count as “swaps” under the Commodity Exchange Act, and whether that classification lets the CEA's exclusive-jurisdiction provision override state gambling laws.
The brief highlights conflicting rulings from three federal appeals courts: the Third Circuit sided with Kalshi, finding its contracts are swaps that preempt New Jersey's gambling law, while both the Ninth Circuit and the Sixth Circuit reached the opposite conclusion, ruling that the contracts are not swaps and that the CEA does not preempt the relevant state gaming rules. “The circuits are fractured,” the states wrote in their filing.
States Lean on Murphy v. NCAA
The amicus brief leans heavily on the Supreme Court's 2018 decision in Murphy v. NCAA, which struck down the federal sports-betting ban and affirmed that gambling regulation has traditionally been a matter for individual states. Ohio and its co-signatories argue that letting a federal commodities law override that authority would upend decades of settled practice.
The brief notes that related disputes over Kalshi's and Polymarket's sports contracts remain pending in the Second, Fourth, Seventh, Eighth and Tenth Circuits, as well as before the Massachusetts Supreme Judicial Court, meaning the fight over how prediction markets intersect with state gambling law is far from settled even if the justices decline to take this case.
The dispute follows a separate, ongoing legal fight in which a federal judge ruled that Utah can enforce its own gambling ban against Kalshi, underscoring how unevenly state-level enforcement has played out while the underlying federal question remains unresolved.
Where the Case Goes From Here
Ohio's brief was one of four amicus filings lodged in the case between October 2 and October 7, 2026, as the Supreme Court weighs whether to grant New Jersey's petition. Kalshi's own response to that petition is not due until November 9, after the Court granted the company a seven-week extension on September 22.
Kalshi has consistently described itself as the first platform offering legal sports contracts in all 50 states, a position several of the states' briefs directly dispute. A decision to grant or deny certiorari in Flaherty v. KalshiEX would be the Court's first direct word on how far federal commodities law can reach into state gambling regulation, a question that has split federal courts and state regulators alike since Kalshi and Polymarket began offering sports-event contracts.
Until the justices rule, the platforms are left operating under a patchwork of outcomes: permitted in some states by court order, blocked in others, and contested almost everywhere else.
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