Supreme Court leaves sports prediction-market petitions pending

The Supreme Court opened its 2026-27 term without taking up the dispute over whether states can apply gambling laws to sports-event contracts traded on federally regulated prediction markets. Its Oct. 1 orders list granted review in three other cases, but none involving prediction markets or gambling.

The two sports-contract petitions remain pending because the parties’ responses are not yet due, according to RG. The court generally does not consider a petition at private conference until the opposing party responds or waives a response, putting a decision on review at least weeks away.

Nevada’s response to Robinhood Derivatives is due Oct. 14. Kalshi’s response to New Jersey is due Nov. 9, after the court extended its deadline from Oct. 8 on Sept. 22.

New Jersey filed Flaherty v. KalshiEX on Sept. 2, asking whether the 2010 Dodd-Frank Act displaced state regulation of sports bets offered on CFTC-registered markets. As covered in September, the state is seeking to overturn a Third Circuit decision that upheld an injunction blocking enforcement of its sports-gambling laws against Kalshi.

Robinhood Derivatives filed Robinhood Derivatives v. Dreitzer on Sept. 10 after the Ninth Circuit’s Aug. 28 ruling for the Nevada Gaming Control Board. Robinhood, a federally regulated futures commission merchant that facilitates trading on regulated contract markets, asks whether the Commodity Exchange Act preempts state gaming laws as applied to sports-related event contracts.

The petitions arise from an acknowledged circuit split. The Third Circuit held that the Commodity Exchange Act preempts state regulation of sports-event contracts traded on designated contract markets, while the Ninth Circuit held the opposite and expressly disagreed. New Jersey’s petition says the Third Circuit affirmed its injunction against the state by a 2-1 vote.

The dispute has continued to broaden outside those two appeals. On Sept. 25, the Sixth Circuit ruled that Ohio and Tennessee could apply their gambling laws to Kalshi’s sports contracts, holding both that Kalshi had not established the contracts were swaps within the CFTC’s exclusive jurisdiction and that state laws were not preempted even if they were swaps.

The filings describe a national conflict involving more than 20 states and more than 30 lawsuits. The CFTC, which maintains it has exclusive jurisdiction over event contracts and the markets on which they trade, sued New Mexico on June 12 to block that state’s application of gaming law to CFTC-registered contract markets.