The U.S. Supreme Court has not yet confirmed whether it will hear the dispute over prediction markets, but legal pressure for the court to intervene continues to grow. Several parties have filed amicus briefs, while the Commodity Futures Trading Commission (CFTC) has introduced an interim final rule and a separate regulatory proposal outlining how it views these products.
Last week, former government officials, state authorities and industry groups urged the Supreme Court to review whether contracts tied to sports outcomes qualify as swaps under federal commodities law. On Friday, the CFTC released two measures addressing the classification and regulation of these contracts.
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Dodd and Other Critics Challenge CFTC Oversight
The Legal Battle Takes Shape
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 interested parties have submitted amicus briefs asking the Supreme Court to consider the case.
Many of the filings contend that sports-based prediction market contracts should be considered gambling products rather than financial swaps. Under that interpretation, state governments—not the CFTC—should have primary authority to regulate them.
The case has gained importance following a split among federal appellate courts. Two appeals courts have classified sports-related prediction markets as gambling activities subject to state regulation, while another has concluded that they fall within the CFTC’s jurisdiction. Such conflicting rulings increase the likelihood that the Supreme Court could be asked to settle the issue.
Dodd Questions the Intent of Dodd-Frank
Dodd, a key figure behind the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act, argued that the legislation was not designed to allow the CFTC to take control of gambling regulation away from states.
His brief challenged a 2-1 decision by a Third Circuit Court of Appeals panel that found the agency had jurisdiction over sports-related swaps and prediction market contracts. Dodd’s argument centered on the difference between financial derivatives and wagers on sporting events.
The filing pointed to parlays, which combine several bets involving different games, sports, point spreads or player performances. According to the brief, such wagers do not support financial activities like hedging or price discovery and do not necessarily have the financial, economic or commercial implications required to qualify as swaps under the Commodity Exchange Act.
Dodd also disputed the CFTC’s claim of exclusive jurisdiction. His brief argued that the law’s exclusive-jurisdiction provision does not exempt every contract traded on a designated contract market (DCM) from state and tribal laws. Instead, it identifies the CFTC as the federal regulator for financial instruments covered by the statute.
Gensler has advanced a similar position, arguing that Dodd-Frank did not authorize the CFTC to override state gambling regulations. He has made comparable arguments in an appellate court proceeding.
NFL Raises Concerns About Regulatory Differences
The NFL also urged the Supreme Court to consider the dispute, citing its direct interest in how sports-related prediction markets are governed.
The league criticized what it described as the CFTC’s “laissez-faire” approach and highlighted the differences between state gambling rules and the federal framework for designated contract markets, the licensing category used by prediction market operators.
CFTC Clarifies Its Position on Event Contracts
The CFTC issued an interim final rule and a separate proposed rule on Friday to explain how it interprets the definition of a swap in relation to prediction market contracts.
The agency said casino-style gambling falls outside its definition of a swap, whereas event contracts remain within it. The proposal would explicitly include contracts tied to sports, politics, cultural events and weather among the event contracts treated as swaps.
These regulatory steps establish the agency’s position as courts continue to weigh the boundaries between federal commodities oversight and state gambling authority.
Prediction market platform Kalshi requested an extension to file its response with the Supreme Court, and the request was granted. Its new deadline is November 9, 2026.
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