The Garden State has become the first to ask the Supreme Court to shut down the sites, arguing companies -- like Kalshi -- refuse to follow its gambling laws.
The Supreme Court could decide later this fall whether to hear the case.
If they do, the justices will determine whether prediction markets can continue in their current form.
New Jersey's Attorney General, Jennifer Davenport, says the companies have no right to offer sports bets without following state laws.
Davenport says those laws have been adopted to prevent compulsive gambling, insider trading, and gambling by minors.