HARRISBURG, PA — Pennsylvania Attorney General Dave Sunday has joined a bipartisan coalition of attorneys general from 40 states urging the U.S. Supreme Court to determine whether prediction-market operators can offer sports-related contracts without complying with state gambling laws, a dispute that could reshape state oversight of sports wagering nationwide.
The coalition is supporting New Jersey’s petition for Supreme Court review of a federal appeals court ruling involving Kalshi, a prediction-market operator that began offering sports-related contracts in 2025.
The dispute centers on whether contracts tied to sporting events fall exclusively under federal commodities regulation or can also be regulated by states as gambling.
In April, the U.S. Court of Appeals for the Third Circuit, which covers Pennsylvania, ruled that the Commodity Futures Trading Commission has exclusive jurisdiction over Kalshi’s event contracts. The decision limits states’ ability to apply their gambling laws to the company’s operations.
Federal appeals courts in the Sixth and Ninth Circuits reached different conclusions in September, finding that states may regulate prediction-market contracts when they function as gambling.
The conflicting decisions have created different regulatory standards across federal jurisdictions, raising questions about how states can enforce gambling restrictions against prediction-market operators.
“Historically, the law has given states the purview to oversee gambling in their jurisdictions, and prediction markets should be subjected to that same oversight,” Sunday said.
“It is our position that sports-related prediction markets should be viewed under the law as sports betting,” he added.
Kalshi operates an exchange where users buy and sell contracts based on the outcomes of events. Its expansion into sports-related contracts has placed the company at the center of a legal dispute over the boundary between federally regulated derivatives markets and state-regulated gambling.
The coalition’s position is that contracts functioning as sports wagers should remain subject to state gambling oversight, regardless of whether they are offered through a prediction-market exchange.
Pennsylvania has previously participated in litigation over the issue. The Attorney General’s Office joined Ohio and 36 other attorneys general in an amicus brief before the Third Circuit and has taken part in similar efforts before the Sixth and Ninth Circuits.
Sunday’s latest action adds Pennsylvania to a multistate effort seeking a uniform legal standard for sports-related prediction markets.
The Supreme Court’s decision on whether to hear New Jersey’s petition will determine whether the justices take up the dispute over federal authority and states’ ability to regulate these contracts.
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