Pressure Builds for U.S. Supreme Court Review of Prediction Markets as CFTC Moves to Clarify Swap Rules

The fight over whether sports-based prediction market contracts should be treated as swaps or as gambling products is moving on two tracks at once: the U.S. Supreme Court is being urged to take the case, while the Commodity Futures Trading Commission is trying to sharpen its own interpretation through new rulemaking. Last week, a wide range of parties filed amicus briefs asking the justices to hear the dispute, including former Senator Chris Dodd, former CFTC and SEC Chair Gary Gensler, the National Football League, 39 states and the District of Columbia, and 145 tribal nations. Many of those filings argue that sports-related prediction market products are not swaps and should not fall under CFTC oversight. The legal backdrop has become more consequential because federal appeals courts are split. Two appellate courts have said prediction markets tied to sports are gambling products that belong under state regulation, while another appellate court has said the issue falls within the CFTC’s jurisdiction. On Friday, the CFTC added its own view by issuing an interim final rule, now in effect, and a separate proposal. The agency said casino-style gambling sits outside its definition of a swap, but event contracts remain inside it, and it wants to formally include sports, politics, cultural and weather events within that category. Kalshi, meanwhile, received an extension and now has until Nov. 9, 2026, to respond to the Supreme Court.