Parties from former Senator Chris Dodd to the NFL have urged the Supreme Court to take up a case on sports-based prediction markets. The CFTC also put out two proposals on how such contracts fit the definition of a swap.
A number of parties filed amicus briefs with the Supreme Court last week, urging it to take up a case on whether sports-based prediction market contracts are swaps. The court has not yet indicated whether it will take up cases surrounding prediction markets.
Briefs largely favor the states
Filers included Dodd, former CFTC chair Gary Gensler, the National Football League, 39 states and the District of Columbia, and 145 tribal nations. Many argue that sports-based prediction market products aren't swaps and shouldn't be regulated by the CFTC.
Dodd, whose name appears on the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act, said in a brief that the law was not intended to let the CFTC usurp state governments' ability to regulate gambling. His filing disagreed with a Third Circuit panel that ruled 2-1 that the CFTC had jurisdiction over swaps and prediction markets covering sports.
Gensler similarly argued that the law did not grant the CFTC authority to preempt state gambling laws. The NFL said it has a vested interest in the outcome, and criticized the CFTC's approach to the issue.
CFTC answers with its own proposals
On Friday, the CFTC proposed an interim final rule and a separate proposal aiming to clarify how these products fall into the definition of a "swap." The agency said casino-style gambling falls outside that definition, but event contracts remain within it.
The regulator also wants to formally include sports, politics, cultural and weather-related events among the event contracts counted as swaps.
There is now a major circuit court split, with two appellate courts ruling that sports-touching prediction markets are gambling products for the states to regulate, and one ruling it is a CFTC issue. Kalshi was granted an extension, and its response to the Supreme Court is now due Nov. 9, 2026.
Source: CoinDesk
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