Supreme Court Sought to Clarify Sports Prediction Market Regulation
Crypto.com and Robinhood have asked the U.S. Supreme Court to clarify whether sports prediction markets should be governed by federal derivatives law or state gambling regulations.
The key question is whether these contracts are federally regulated financial products or offerings that states can police under gambling law.
Federal appeals courts have reached opposite conclusions, with the Third Circuit finding that Kalshi's sports contracts fall within federal derivatives regulation and the Ninth Circuit ruling that they do not qualify as swaps under the Commodity Exchange Act.
The dispute has significant implications for operators trying to offer sports-event contracts through federally regulated exchanges. Robinhood has partnered with Crypto.com and OG.com to route certain football contracts through a federally regulated exchange, making the legal question especially important.