Crypto.com and Robinhood have asked the U.S. Supreme Court to clarify whether the Commodity Futures Trading Commission has exclusive authority over sports prediction markets, escalating a dispute that has produced conflicting federal appeals court rulings and state enforcement actions.
The petitions follow a Ninth Circuit ruling involving Nevada that found sports event contracts are not swaps under the Commodity Exchange Act and rejected arguments that federal law pre-empts state gambling rules. Crypto.com’s North American Derivatives Exchange filed its petition on September 11, shortly after Robinhood submitted a separate request.
“The Supreme Court now has the opportunity to provide clarity on the regulation of prediction markets, which we believe rightly sits with the CFTC,” a Robinhood spokesperson wrote.
“It’s our position that the Court should review these cases collectively as we seek to ensure every eligible customer has access to these markets as a tool to aggregate dispersed information, hedge risk, and speculate on their beliefs about future events.”
Crypto.com is asking the court to decide “whether the [Commodity Exchange Act] preempts state regulation of sports-event contracts traded on a [Designated Contract Market].” The question closely resembles one raised by New Jersey in a separate Supreme Court petition involving Kalshi and a Third Circuit ruling that supported the platform’s federal regulatory claims.
Crypto.com argues that sports contracts fall within the federal derivatives framework because their payouts depend on sporting outcomes with potential economic consequences.
“Sports-event contracts are swaps because their payout depends on the occurrence of a sporting outcome (the ‘event or continency’ — e.g., did the Rams make the playoffs?) that is associated with potential economic consequences (i.e., the billions of dollars of economic activity that surround sports entertainment),” the filing reads in part.
Crypto.com argues that sports-event contracts can be used to manage financial exposure linked to sporting outcomes. It points to businesses such as vendors and merchandise sellers, whose inventory and distribution decisions may depend on whether an event takes place and how it develops.
Crypto.com further points to Congress’ inclusion of gaming among categories the CFTC can prohibit under a special rule.
“That explicit reference to ‘gaming’ confirms that Congress contemplated the very interaction between swaps and gambling that the Ninth Circuit claims it couldn’t have imagined,” the filing reads.
“Today’s petition to the Supreme Court is an important step toward obtaining clarity on who gets to regulate federally registered prediction markets. We have faith in the judicial process and are confident the Court will find that these important financial instruments are subject to exclusive CFTC oversight,” a Crypto.com spokesperson told SBC Americas.
“We have always prioritized compliance with our regulatory obligations, and are proud that our regulator, the CFTC, supports the industry’s effort to obtain clarity through the judicial process. We welcome the Court’s review.”
The dispute has also spread to Connecticut, which issued cease-and-desist orders to Crypto.com, Robinhood and other platforms offering sports-related event contracts. Underdog has sued the state, arguing that federally traded sports prediction contracts fall under exclusive CFTC jurisdiction.
Kalshi is pursuing an en banc rehearing at the Ninth Circuit after a three-judge panel ruled against its sports contracts. The court found that the contracts were not swaps and that existing CFTC rules bar designated contract markets from listing certain gaming-related products. Kalshi argues that the panel misread federal law and regulatory guidance.
The CFTC has sided with Kalshi on the Ninth Circuit’s interpretation, but the court rejected both positions. CFTC Chair Michael Selig has separately outlined plans for a clearer national framework for prediction markets, including possible changes to Rule 40.11 governing event contracts.