Prediction Markets Face SCOTUS Ruling on Federal Authority

Crypto.com and Robinhood have filed petitions to the U.S. Supreme Court, seeking clarification on federal authority over sports prediction markets.

The companies argue that federally regulated prediction markets should remain within the Commodity Futures Trading Commission's (CFTC) jurisdiction, while state regulators assert that such contracts are subject to their own gambling laws.

A circuit split has emerged between the Third and Ninth Circuits, with the former ruling in favor of CFTC jurisdiction and the latter finding that sports event contracts do not qualify as swaps under the Commodity Exchange Act (CEA).

Kalshi, a prediction-market operator, has taken a different approach by filing for an en banc rehearing in the Ninth Circuit.