The U.S. Supreme Court has not yet announced whether it will review the ongoing legal dispute over prediction markets. However, calls for the court to intervene have intensified, with numerous parties submitting amicus briefs and the Commodity Futures Trading Commission (CFTC) issuing new regulatory measures to clarify its position.

Last week, former officials, state governments, tribal nations and industry representatives urged the Supreme Court to determine whether contracts based on sports outcomes qualify as swaps under federal law. On Friday, the CFTC published an interim final rule and a separate proposal addressing how these contracts should be classified.

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Calls Grow for Supreme Court Review of Prediction Markets

States Challenge Federal Regulatory Authority

Former Senator Chris Dodd, former CFTC and SEC Chair Gary Gensler, the National Football League (NFL), 39 states and the District of Columbia, 145 tribal nations, and other organizations have filed briefs asking the Supreme Court to take up the case.

Many argue that sports-related prediction contracts are essentially gambling products, not financial swaps, and should therefore be regulated by state governments rather than the CFTC.

The dispute has become more prominent following conflicting decisions in federal appeals courts. Two appellate courts have ruled that prediction markets involving sports fall under state gambling laws, while a third has determined that the CFTC has jurisdiction over these products. The disagreement among the courts could strengthen the case for Supreme Court intervention.

Dodd Says Dodd-Frank Was Not Designed to Override State Laws

Dodd, whose name is associated with the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act, argued that the law was not intended to give the CFTC authority to displace state governments’ power to regulate gambling.

His filing challenged a 2-1 ruling from a Third Circuit Court of Appeals panel that placed sports-related prediction contracts within the CFTC’s jurisdiction. Dodd argued that financial derivatives and sports wagers serve different purposes and should not automatically be treated as equivalent.

The brief highlighted parlays, which combine multiple wagers involving different games, sports, point spreads or player performances. It argued that such bets do not facilitate hedging or price discovery and may not have the financial, economic or commercial consequences required for classification as swaps under the Commodity Exchange Act.

Dodd also rejected the idea that the CFTC’s exclusive jurisdiction prevents states and tribal governments from applying their own laws to all contracts listed on designated contract markets (DCMs). His filing maintained that the provision establishes federal oversight of covered financial instruments rather than granting prediction market operators blanket protection from state and tribal regulation.

Gensler expressed a similar view, arguing that Dodd-Frank did not authorize the CFTC to supersede state gambling laws. He has raised comparable arguments in a separate appellate proceeding.

NFL Questions the CFTC’s Regulatory Approach

The NFL also called for Supreme Court review, citing the importance of sports betting to the wider sports industry.

The league criticized what it characterized as the CFTC’s “laissez-faire” approach to prediction markets. It also pointed to differences between state-level rules governing gambling businesses and federal regulations for designated contract markets, the licensing framework used by prediction market platforms.

CFTC Releases Rules on Prediction Market Contracts

On Friday, the CFTC issued an interim final rule alongside a separate proposed rule explaining its interpretation of how prediction market products fit within the legal definition of a swap.

The regulator said casino-style gambling is excluded from that definition, while event contracts remain covered. It also proposed explicitly recognizing contracts based on sports, politics, cultural events and weather as event contracts that qualify as swaps.

The measures outline the agency’s approach as the courts continue to consider whether these products fall under federal commodities law or state gambling regulations.

Prediction market operator Kalshi has been granted additional time to respond to the Supreme Court. Its revised filing deadline is November 9, 2026.

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