Prediction market operators including Kalshi and Robinhood face legal disputes with several states, with a Supreme Court resolution described as a likely possibility by lawyer Andrew Kim. A court review could come as early as mid-2026 or as late as 2029, while the timing and outcome remain uncertain.
The disputes may affect whether prediction market operators can offer sports event contracts across state lines.
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The US Supreme Court may consider whether sports-related event contracts fall under federal financial regulation or state gambling laws, as it reviews cases for its new term. The Third and Ninth Circuits have reached opposing conclusions in disputes involving Kalshi, while petitions urge the court to address the issue.
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 Stifel analyst said the US Supreme Court could begin considering challenges to prediction market operations in the coming years, possibly as early as 2026. Kalshi faces disputes in Nevada and Massachusetts, and its position is that its sports event contracts fall under federal rules because it is regulated by the Commodity Futures Trading Commission; critics argue the contracts amount to unlicensed sports betting.
Ohio has asked the US Supreme Court to hear a dispute over authority to regulate sports prediction markets. A bipartisan coalition of 39 states supports the request. Ohio argues states should oversee these products, while operators including Kalshi and Polymarket say they offer swaps under Commodity Futures Trading Commission supervision.
Ohio has asked the US Supreme Court to hear a dispute over whether sports-related prediction markets fall under state gambling law or federal oversight of swaps, according to a filing by the state. Ohio is leading a bipartisan coalition of 39 states in the request. The Supreme Court is not required to take the case, and it is not yet known whether the justices will agree to hear it.
Crypto.com and Robinhood Markets asked the US Supreme Court to clarify whether state gaming regulators can act against event contracts, arguing that the Commodity Exchange Act pre-empts such action. The court has not agreed to take up the issue, while state regulators contend that sports event contracts fall under gambling laws and require licences.