Crypto.com and Robinhood Petition Supreme Court to Affirm CFTC Authority Over Sports Prediction Markets

Crypto.com and Robinhood have petitioned the U.S. Supreme Court to clarify whether the Commodity Futures Trading Commission holds exclusive authority over sports prediction markets. The action addresses conflicting federal appeals court rulings and resulting state enforcement actions that have created regulatory uncertainty.

The petitions follow a Ninth Circuit ruling involving Nevada. That decision found sports event contracts are not swaps under the Commodity Exchange Act and rejected claims that federal law preempts state gambling rules. Crypto.com’s North American Derivatives Exchange filed on September 11, after Robinhood submitted its request.

A Robinhood spokesperson wrote that the Supreme Court has the opportunity to provide clarity on the regulation of prediction markets, which the company believes rightly sits with the CFTC. Robinhood added that the court should review these cases collectively to ensure eligible customers can access these markets to aggregate information, hedge risk, and speculate on future events.

Core Arguments for Federal Preemption

Crypto.com asks the court to decide whether the Commodity Exchange Act preempts state regulation of sports-event contracts traded on a designated contract market. The question tracks a separate Supreme Court petition from New Jersey involving Kalshi and a supportive Third Circuit ruling.

Crypto.com argues these contracts qualify as swaps. “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.

The petition cites vendors and merchandise sellers who manage exposure tied to sporting outcomes. It notes Congress included gaming among categories the CFTC can prohibit, confirming lawmakers anticipated overlaps between swaps and gambling. A Crypto.com spokesperson told SBC Americas the petition is an important step toward clarity on regulation of federally registered prediction markets and expressed confidence in exclusive CFTC oversight.

The dispute has reached Connecticut, which issued cease-and-desist orders to Crypto.com, Robinhood and others. Underdog sued the state asserting CFTC jurisdiction. Kalshi seeks en banc rehearing after an adverse panel ruling that the contracts were not swaps and that CFTC rules bar certain gaming products. CFTC Chair Michael Selig has outlined plans for a clearer national framework, including possible changes to Rule 40.11. As reported by Yogonet International, these petitions seek to resolve the tensions.

The Regulatory Clarity at Stake

A Supreme Court decision favoring preemption would curb state enforcement and deliver uniform federal rules that platforms require. Yet the conflicting circuit rulings expose limits in current interpretations of the Commodity Exchange Act. Platforms face continued compliance risks and operational restrictions until resolution arrives through the court or revised CFTC guidance. This review presents the chance to align prediction market oversight with derivatives law while preserving appropriate boundaries.

Reporting: Yogonet International

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