Prediction Market Operators Seek Supreme Court Clarity Amid U.S. Circuit Split and Canadian Gambling Ruling

Prediction market operators are pressing for regulatory resolution as Robinhood and Crypto.com petition the U.S. Supreme Court over jurisdiction of sports event contracts.

Robinhood and Crypto.com filed petitions seeking review of the U.S. Court of Appeals for the Ninth Circuit’s decision affirming denial of a preliminary injunction against Nevada. The companies have suspended all sports event contracts for Nevada residents while the review is pending.

“Today, we filed our petition to the Supreme Court seeking clarity on who ultimately gets to regulate federally registered prediction markets,” Justin Wales, Crypto.com’s chief legal officer, said. “We have always prioritized compliance with our regulatory obligation, and are proud that our regulator, the Commodity Futures Trading Commission, supports the industry’s effort to obtain clarity through the judicial process.”

A Robinhood spokeswoman confirmed the filing and said the Supreme Court now has the opportunity to provide clarity on the regulation of prediction markets, which the company believes rightly sits with the CFTC.

U.S. Circuit Split Drives Kalshi and State Petitions

The petitions follow Kalshi’s request for an en banc rehearing before the Ninth Circuit. That court’s panel ruled unanimously that sports-event contracts were not swaps but sports wagers, so the Commodity Exchange Act (CEA) does not preempt state regulation of Kalshi’s contracts.

This creates a circuit split. The U.S. Court of Appeals for the Third Circuit ruled 2-1 in May in favor of Kalshi, holding that the contracts are swaps under exclusive CFTC jurisdiction. Judge Jane Richards Roth dissented, arguing the contracts are indistinguishable from traditional sports betting and should remain subject to state gaming regulations.

New Jersey asked the Supreme Court to settle the dispute. In its 78-page filing, Kalshi contends the Ninth Circuit decision conflicts with the plain text of the CEA by exposing the firm to civil and criminal liability despite abiding by federal law and its regulator’s mandate. As reported by CDC Gaming, Kalshi maintains Congress granted the CFTC exclusive jurisdiction over swaps traded on designated contract markets.

Canadian Stance and Polymarket’s Finance Appointment

In Canada, British Columbia regulators determined that trading sports and entertainment prediction contracts is gambling. The Independent Gambling Control Office (IGCO) stated these products must be regulated under the Criminal Code of Canada and provincial gaming legislation.

“The British Columbia Lottery Corporation (BCLC) is the only entity permitted to conduct and manage commercial gambling, including online gambling and sports betting, on behalf of the provincial government,” the IGCO said. The British Columbia Securities Commission added that assessment of other event contracts as securities or derivatives remains ongoing.

Separately, Polymarket hired Warren Jenson as its first chief financial officer. Jenson previously held the position at Amazon, Delta Air Lines, and Nielsen. “Polymarket created a massive new global company. The opportunity ahead of us is enormous,” Jenson said.

Shayne Coplan, founder and CEO of Polymarket, said the hire assembles a team to match the opportunity, with Jenson’s experience critical to what the company builds next.

The conflicting rulings leave operators exposed to fragmented rules depending on jurisdiction.

Reporting: CDC Gaming

Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.