Robinhood Markets, Inc. recently filed a petition for a writ of certiorari with the U.S. Supreme Court on September 9, 2026, seeking the nation’s highest court to determine the regulatory framework for sports event contracts. This move aims to resolve the ongoing legal debate over whether these prediction market instruments fall under federal commodities law or are subject to state gambling regulations.
Read our Prediction Market Report 2026 here.
The petition challenges a recent Ninth Circuit ruling that found sports event contracts do not qualify as swaps under the Commodity Exchange Act (CEA) and rejected arguments that federal law preempts Nevada's gambling regulations. Robinhood argues that this ruling creates significant uncertainty and a fragmented regulatory environment for federally regulated exchanges offering such contracts.
Ninth Circuit Ruling Challenged
The core of Robinhood's appeal lies in overturning a Ninth Circuit decision that has complicated the legal status of sports event contracts. The appeals court concluded that these contracts do not meet the definition of swaps under the Commodity Exchange Act, thereby undermining claims of federal preemption over state gambling laws. This interpretation has left prediction market operators, including Robinhood and its partner Kalshi, vulnerable to varied state-level enforcement actions.
The Ninth Circuit's stance contrasts with the industry's view that event contracts, particularly those traded on CFTC-regulated exchanges, should be governed by federal commodities law. Robinhood, which offers access to Kalshi's prediction market platform, maintains that its contracts fall squarely within the federal derivatives framework.
Broader Industry Implications
Robinhood is not alone in its pursuit of Supreme Court intervention. Crypto.com's North American Derivatives Exchange (Nadex) filed a similar petition on September 11, 2026, also urging the Supreme Court to address the regulatory ambiguity. Both companies contend that allowing individual states to regulate federally approved contracts could lead to a patchwork of inconsistent rules, hindering innovation and market access.
This coordinated effort underscores the industry's desire for a definitive ruling that would establish clear federal oversight, preventing a scenario where prediction markets face differing legal standards across various states. The outcome could significantly impact the operational models and expansion plans of prediction market platforms nationwide.
Background to the Litigation
The filing is the latest development in a series of legal battles surrounding prediction markets. Robinhood has been embroiled in litigation with several state gaming commissions, including Nevada and Washington, which view sports event contracts as illegal gambling. Robinhood has filed preemptive lawsuits in some states, arguing for federal preemption.
Additionally, Robinhood faces multiple class-action lawsuits, such as Mazza v. Robinhood Markets, Inc., filed in the U.S. District Court for the Northern District of California on June 10, 2026. These lawsuits allege that Robinhood's prediction markets constitute illegal gambling and violate state laws, with plaintiffs seeking to recover losses and disgorgement of profits.
What to Watch
The immediate next step is for the U.S. Supreme Court to decide whether to grant Robinhood's (and Nadex's) petition for a writ of certiorari. If granted, the Court would hear arguments and issue a ruling that could provide much-needed clarity on the federal versus state jurisdiction over prediction markets. If denied, the Ninth Circuit's ruling would stand, potentially intensifying state-level regulatory challenges and further fragmenting the legal landscape for event contracts. The industry will be closely watching the Supreme Court's docket for any indication of its decision to take up these pivotal cases.
Original announcement: U.S. Supreme Court Docket (via CourtListener)