A federal court dispute may force the Supreme Court to decide whether the CFTC or states regulate event-based prediction markets.
The Commodity Futures Trading Commission and several US states are locked in a legal battle over jurisdiction of prediction markets, including platforms like Polymarket and Kalshi. The CFTC asserts exclusive federal authority, while states argue these markets fall under gambling laws, creating regulatory uncertainty for the sector’s rapid growth this year.
Legal observers note conflicting appellate rulings could escalate the case to the US Supreme Court. The outcome may determine whether federal or state regulators oversee event contracts, a decision with broad implications for market structure and investor protections.
The dispute coincides with rising scrutiny of prediction markets, which have expanded beyond sports and politics into financial and macroeconomic forecasting. No immediate market reaction was reported, but regulatory clarity could shape future liquidity and platform operations.