A coalition of states, sports organizations, and former financial regulators has filed amicus briefs with the U.S. Supreme Court requesting that it take up cases concerning the regulatory classification of sports-based prediction markets. The filings argue these products should be treated as gambling rather than financial derivatives, placing them under state jurisdiction rather than federal oversight by the Commodity Futures Trading Commission.
The Supreme Court has not yet indicated whether it will accept the case. The push comes as a split exists among federal appellate courts on the issue: two courts have ruled prediction markets touching sports are gambling products regulated by states, while one court determined the CFTC has jurisdiction over them as swaps.
Who is weighing in
Former Senator Chris Dodd, whose name is attached to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act central to the dispute, filed a brief arguing the law was not intended to grant the CFTC authority to override state gambling regulation. He contended that sports wagers, including parlays combining multiple bets, do not meet the legal definition of swaps under the Commodity Exchange Act because they lack hedging or price discovery functions.
Former CFTC Chair Gary Gensler, who helped draft Dodd-Frank regulations, similarly argued the law does not authorize the CFTC to preempt state gambling laws.
The National Football League also filed a brief, citing its vested interest in sports betting outcomes and criticizing what it described as the CFTC's inconsistent regulatory approach compared to how states oversee gambling operators.
Additional filers include 39 states, the District of Columbia, and 145 tribal nations, most urging the Court to side with state-level regulation of sports prediction markets.
CFTC responds with new rules
On October 11, 2026, the CFTC released an interim final rule and a separate proposal clarifying its interpretation of prediction market products. The agency stated that casino-style gambling falls outside its swap definition, but event contracts remain within it. The CFTC proposed formally designating sports, politics, cultural, and weather-related events as event contracts subject to its oversight.
Kalshi, a prediction market operator, received an extension to file its response to the Supreme Court, with a deadline of November 9, 2026.
