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.
A ruling could clarify whether states can apply gambling laws to sports event contracts.
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Crypto.com and Robinhood have separately asked the US Supreme Court to clarify whether federal law gives the Commodity Futures Trading Commission exclusive authority over sports event contracts, according to reports. Their petitions follow a Ninth Circuit ruling involving Nevada that rejected federal pre-emption of state gambling rules; Robinhood said it wants the court to review the cases together.
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.
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.
The NFL has submitted an amicus brief supporting New Jersey’s bid to bring sports prediction market oversight before the US Supreme Court. The league wants clarification on the division of authority between the CFTC and state gambling regulators. Kalshi supports nationwide federal rules, while the court is not expected to announce whether it will take the case before December.
New Jersey officials want the US Supreme Court to take up a case about which authority oversees contracts tied to sports prediction markets, and the NFL has now backed that request in an amicus brief. According to the filing, the league told the justices that appellate courts have reached conflicting conclusions on the question, which turns on whether the Commodity Futures Trading Commission holds primary responsibility or whether state gambling regulators do. Whether the court grants review will not be known before December, the filing indicates.
Former New Jersey Governor Chris Christie said the dispute between states and federal authorities over sports-related prediction-market contracts is likely to reach the US Supreme Court. Christie, a strategic adviser to the American Gaming Association, claimed states had won 85% of related cases; Kalshi’s head of enforcement said the split was closer to 50-50. CFTC Chairman Michael Selig defended the agency’s federal authority.