The International Association of Gaming Regulators (IAGR) and North American Gaming Regulators Association (NAGRA) have begun seeking a Supreme Court review of the Flaherty v. Kalshi case, requesting the Court “resolve conflicting appellate interpretations” of prediction markets legality.
“IAGR is concerned that sports wagering offered through prediction markets leaves consumers without the protection gaming regulators provide pursuant to public policy established in their jurisdiction. Our brief challenges the claim that offering a sports wager as an event contract exempts it from state gambling laws,” IAGR President Ben Haden said.
“Without the protection and oversight provided by gaming regulators, we are highlighting the risks of underage players being able to access gambling freely, problem gamblers being left without proven harm-prevention tools – or worse, being targeted by operators – and the integrity of sport being put at risk. Regulators need clarity about their authority to enforce proven safeguards and the limits their jurisdictions have placed on gambling.”
In April, the US Court of Appeals for the Third Circuit ruled that the Commodity Futures Trading Commission (CFTC) maintained “exclusive jurisdiction” over Kalshi and the trading of sports-related event contracts.
Court officials also ruled New Jersey regulators, such as the state’s Division of Gaming Enforcement (DGE), are prohibited from attempting to prevent Kalshi from offering prediction markets to eligible residents.
However, the Ninth US Circuit Court of Appeals in San Francisco then ruled against Kalshi in the operator’s efforts to file an injunction against Nevada regulators on August 28.
Following the decision, New Jersey Attorney General Jennifer Davenport filed an inaugural petition with the US Supreme Court to determine whether prediction markets can legally offer sports-related event contract trading without following state regulations.
Prior to the IAGR and NAGRA’s request, Wallach Legal Founder Daniel Wallach confirmed his belief that a Supreme Court ruling on the legality of prediction markets and sports-related event contract trading could be handed down by mid-2027.
“It seems to me that prediction markets don’t want this issue settled right away,” Wallach said at the G2E tradeshow in Las Vegas. “Overall, no matter what happens, I think the states are sitting in a very good position.”
Wallach, along with American Gaming Association President & CEO Bill Miller and Indian Gaming Association Chairman David Bean, made sure to point out that 44 Attorney Generals in the US agree that prediction markets should be regulated on the state level.
Perhaps the requests from Davenport, IAGR and NAGRA will push Wallach’s timeline forward, although the US is set to undergo midterm elections in November which may play a key role in the prediction markets battle.
A New Jersey Committee approved AR 150 on September 14, which urges heightened restrictions on gambling advertisements following the incident involving Bryce Harper and FanDuel
