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A key New Jersey lawmaker is urging the state to appeal a recent federal court ruling involving prediction markets, warning it could weaken consumer protections and undercut the state’s regulated New Jersey sports betting industry.
As PlayNJ reported earlier this week, the US Court of Appeals for the Third Circuit ruled that federal law likely prevents New Jersey from enforcing its gambling laws against Kalshi, a prediction market platform offering contracts tied to sports outcomes.
Lawmaker says states have authority to regulate gaming
In response, Senate President Pro Tempore Shirley Turner sharply criticized the decision, arguing it creates a gap between how prediction markets are labeled and how they function.
“Contracts tied to the outcomes of sporting events and other real-world occurrences function like gambling, yet are not held to the same standards that apply in New Jersey.
“When something looks and operates like gambling, it is gambling.”
Turner emphasized that states have historically had authority to regulate gaming and warned that allowing platforms to operate outside those rules could erode consumer protections.
“Gaming should never operate outside the consumer protections and safeguards our state has put in place.”
Concerns over taxes and competition
Beyond consumer safeguards, Turner pointed to what she described as an uneven playing field between licensed operators and federally regulated prediction platforms.
“Legal sports betting operators in New Jersey pay taxes that support critical public services, while prediction market platforms can avoid those same obligations.
That is not just a loophole; it is an unfair advantage that undercuts a regulated industry, deprives the state of revenue, and shifts the burden onto compliant businesses and taxpayers.”
The comments echo broader concerns from state officials following the ruling, which hinges on whether Kalshi’s contracts fall under federal commodities law rather than state gambling oversight.
Operators are currently taxed at 19.75% after Gov. Phil Murphy signed the hike into law last year.
Push for appeal and legislative response
Turner is now calling on state officials to continue the legal fight.
“I encourage Attorney General Davenport to appeal this decision to safeguard New Jersey’s regulatory authority and maintain fairness for both consumers and industry operators.”
The ruling stems from a preliminary injunction, meaning Kalshi can continue operating in New Jersey while the case moves forward.
At the same time, Turner noted that lawmakers are already pursuing a legislative response. She recently introduced a bill that would prohibit unregulated prediction markets in the state and require any sports-related markets to operate under New Jersey’s existing sports wagering laws.
For now, the decision leaves open major questions about how – or whether – New Jersey can regulate prediction markets going forward, as the state weighs its next move.
