A total of 39 states plus Washington D.C., 145 tribal groups, the NFL, former SEC Chair Gary Gensler, and former Senator Chris Dodd jointly filed amicus briefs with the US Supreme Court last week. They urged the justices to take up the case to decide the legal status of sports prediction market contracts: whether they constitute financial swaps or outright gambling.
The vast majority of the legal briefs back state authorities. For this coalition, wagers on the outcome of sports games are gambling products that fall squarely under state jurisdiction under US law, rather than the purview of a federal commodities regulator like the Commodity Futures Trading Commission (CFTC).
What sets this opposition apart is not just the breadth of the coalition, but the intervention of the very lawmaker who crafted the underlying statute.
Why the Architect of the Dodd-Frank Act Is Speaking Out
Chris Dodd, the key figure behind the 2010 Dodd-Frank Act that overhauled US financial regulation, stated that the law was never intended to grant the CFTC authority to usurp gambling regulation from the states. Dodd’s stance directly disputes the legal interpretation used by the CFTC to expand its regulatory reach into prediction markets.
Gary Gensler took a similar position. The former CFTC and SEC chair emphasized that Dodd-Frank does not grant federal regulators the authority to override state gambling laws, reiterating arguments he had previously submitted during appellate proceedings.
From the sports industry, the NFL highlighted what it viewed as an overly hands-off, laissez-faire regulatory approach by the CFTC. The largest sports league in the US underscored the sharp contrast between stringent state-level gambling regulations and the comparatively loose framework governing licensed contract markets under CFTC supervision.
Two Conflicting Appeals Court Rulings
Calls for the Supreme Court to intervene have intensified due to a federal circuit court split. Two appellate courts have ruled that sports prediction markets are gambling products subject to state jurisdiction. In contrast, another appeals court ruled that the matter falls under the CFTC’s jurisdiction.
The CFTC responded to the escalating dispute by issuing an interim final rule and a separate proposal on Friday. The federal agency determined that casino gambling is excluded from the definition of a swap, but continued to incorporate event contracts - spanning sports, politics, culture, and weather - into its swap regime.
The regulatory battle now awaits an official response from the Supreme Court. Prediction market platform Kalshi has secured a deadline extension to November 9, 2026, to file its formal response with the justices. The high court’s decision will ultimately determine whether prediction exchanges continue operating under federal commodities oversight or must comply with gambling laws across dozens of state jurisdictions.
Source: CoinDesk.
Previously: CFTC Reclassifies Prediction Markets as Swaps - Solo Commissioner Maneuver Facing Supreme Court
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