Crypto.com and Robinhood have asked the U.S. Supreme Court to clarify whether the Commodity Futures Trading Commission holds exclusive authority over sports prediction markets. The petitions follow conflicting rulings from federal appeals courts and enforcement actions by state regulators.
North American Derivatives Exchange, Crypto.com's exchange, filed its petition on 11 September, shortly after Robinhood made a similar request. Both respond to a Ninth Circuit decision in a case involving Nevada, which held that sports event contracts are not swaps under the Commodity Exchange Act and that federal law does not preempt state gambling rules.
Crypto.com argues the contracts are federal derivatives because payouts depend on sports outcomes with real economic consequences. The petition cites billions in turnover around sports events and the hedging needs of businesses such as suppliers and merchandise sellers whose inventory decisions turn on match results. It also notes that Congress listed gaming among the categories the CFTC may prohibit by special rule.
'The Supreme Court can bring clarity to the regulation of prediction markets, which we believe should sit with the CFTC,' a Robinhood spokesperson said. A Crypto.com spokesperson said the company expects the court to recognize these financial instruments as subject to exclusive CFTC oversight.
States push back
Connecticut has issued cease-and-desist orders to Crypto.com, Robinhood and other platforms. Underdog sued the state, arguing that federally traded sports prediction contracts fall under CFTC jurisdiction. Kalshi is seeking en banc review at the Ninth Circuit after losing on its own sports contracts; the CFTC backed Kalshi's position and the court rejected both sides. CFTC chair Michael Selig has announced plans for a clearer national framework for prediction markets.
