Industry experts at a New York conference said disputes over prediction-market oversight could eventually reach the US Supreme Court. Andrew Kim of Goodwin Procter said conflicting court rulings could accelerate a case, though experts expected no Supreme Court decision before 2027.
A ruling could determine whether federal derivatives law or state gambling rules govern prediction-market contracts.
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Joe Webster, a partner with Hobbs Strauss, expects the US Supreme Court ultimately to resolve sports event contract disputes. Webster said some 80 cases had been filed across state and federal courts, with about 85% of decisions going against prediction markets.
It was reported that court pressure on the CFTC and approaching geofencing deadlines feature among the week's gambling developments. Its preview also identifies Washington meetings and forthcoming July sports betting figures as subjects to watch.
Attorney Josh Sterling said prediction market operators could pursue state sportsbook licences or expand into other financial products if the Supreme Court rules against their sports event contracts. New Jersey has asked the court to review the dispute after the Third Circuit ruled for Kalshi in April. The justices have not agreed to hear the case.
Attorney Josh Sterling told the NEXTPredict conference in New York on Friday that prediction market firms have options should the justices side against them on sports event contracts. Those options, the Milbank partner and former Commodity Futures Trading Commission official said, include applying for sportsbook licences, moving deeper into other financial products, or creating offerings that earn more. Covers reported his remarks. New Jersey wants the Supreme Court to settle the matter following the Third Circuit's April decision for Kalshi, but the justices have not yet granted review.
Nevada Gaming Control Board Chairman Mike Dreitzer said on a podcast that prediction market operators such as Kalshi are running illegal sportsbooks, and that Nevada has no fallback plan if the Supreme Court sides with them. He urged tribes and licensees to hold firm, even though several tribes have partnered with Kalshi this month. The comments followed a CFTC interim rule of 9 October excluding casino-style gambling products from the definition of a swap, alongside a proposed rule covering event contracts.
It was reported that the NFL petitioned the United States Supreme Court over state oversight of prediction markets. The league wants states to have authority to regulate those markets.