The Road May Lead Back to New Jersey
The state that transformed the sports gambling landscape may soon ask the Supreme Court to weigh in again
The Road Back to SCOTUS May Run Through New Jersey–Again
After losing at the Third Circuit, New Jersey asked SCOTUS for an additional 60 days—until early September—to decide whether to seek Supreme Court review. Justice Alito granted only half that request, giving the state until August 4 to file its petition.
That deadline now carries unusual significance, not necessarily because of the date itself, but the context surrounding it: August 4 sits at the intersection of:
A rapidly expanding national litigation crisis;
A likely circuit split;
A live international prediction market on this very issue;
A question that went to SCOTUS before (me);
A state that went to SCOTUS before (New Jersey - Murphy); and
A Supreme Court that appears to want the petition sooner rather than later.
An Even Chance?
According to Polymarket, the chances that the Supreme Court agrees to hear the case before the end of the year are currently around 51% (it was 42% yesterday):
True, this market is thin volume-wise, with just over $11,000 traded, but I don’t think the estimate is wildly off the mark.
If the Court does indeed grant certiorari, the historical symmetry would be striking.
Less than a decade ago, New Jersey persuaded the Supreme Court in Murphy v. NCAA that Congress could not require states to prohibit sports betting. That decision opened the door to nationwide expansion of state-regulated sports wagering.
Well, that’s what everyone thought. My take is different:
But popular opinion carried the day, and New Jersey became the vehicle enabling state-regulated sports betting.
Now the same state could become the vehicle for answering a related question:
Who has the authority to regulate sports event contracts—the states or the federal government?
The “Preemption” question. The first P in my 3P Framework (podcast).
Is that the only question? No. It is just the first one. Permissibility is the second and parallelism is the third.
That is the natural order of these questions. As a side note, that is not how the broader litigation unfolded. It started with permissibility first, involving an election contract case, not even a sports event contract case. The CFTC, inexplicably decided to shift from the merit regulator it has always been to a regulator that didn’t utilize the authority it actually has. With that concession, Kalshi’s argument became the better one, and they won.
Kalshi had also made a concession in that case–that there is no room for sports event contracts under the CEA–but that concession was no longer needed after they won, so they walked it back. Then, the preemption argument went to court. We are still there and parallelism is not being litigated yet, but I’m fairly certain it eventually will be.
The particular sequencing aside, I am convinced that a proper resolution runs through resolving all three questions together. Not long ago, I believed SCOTUS would look at all three and make a holistic assessment.
But they won’t. They can’t. The permissibility and parallelism issues aren’t even on the table because most states have no incentive to present them as issues.
That leaves one near-certain question for the Court:
Who has the authority to regulate sports event contracts—the states or the federal government?
In my mind, this is simply a slight variation of the question I asked the Supreme Court 13 years ago in the form of a petition.
SCOTUS denied that petition. If it takes this next one, the states may wish it hadn’t.
Strong Tailwinds… Forming A Storm?
Things have changed. When I asked the question 13 years ago, there were zero active cases, and as of today, there are 99. The litigation jam was my pitch to SCOTUS: Take the case now and avoid all of this. What I predicted has happened and now the sheer volume of litigation is part of the reason SCOTUS may need to hear this.
The other factor is New Jersey itself.
New Jersey isn’t just another state claiming injury. It is the state whose actions–and victory–set the stage for this entire conflict. Legally, that has no bearing, but it does carry a certain poetic weight. It’s not hard to imagine at least one Justice thinking, even subconsciously: “They’re the reason we’re here. Let’s close the loop.” With SCOTUS, there is a Rule of Four, so if that Justice is the fourth to think that way, that’s the difference between granting cert and denying it.
There’s another poetic twist: SCOTUS would take a case that already has an active prediction market contract on Polymarket–a market that exists so traders can forecast whether SCOTUS will take the case. Because U.S. residents can’t access this market on Polymarket (at least not yet, unless they fake their true origin via using a VPN), the irony is even sharper: International traders are speculating on whether the Supreme Court will decide how the U.S. system itself is meant to function.
So yes, the question is more powerful in New Jersey’s hands than it was in mine; and arguably, more powerful than in the hands of any other state.
None of this guarantees that cert will be granted, but this is a game of probabilities.
By the time SCOTUS makes its decision–assuming New Jersey gets their petition submitted in time–there will almost certainly be 100+ cases, a psychological milestone. In addition, the Ninth Circuit is widely expected to rule for Nevada, creating a circuit split.
It may not be a perfect storm, but it is getting close.
Closing the Loop
History doesn’t always repeat itself.
But sometimes it circles back to the very place where it began.
New Jersey once opened the door to state-regulated sports gambling. Now it may be the state that forces the Supreme Court to decide who actually controls the field.
If SCOTUS takes the case, the consequences will reach far and wide. If not, the litigation storm will continue to manifest.
Either way, the next chapter of prediction markets is about to be written–and New Jersey is on the front lines.
