Former Senator Chris Dodd, former CFTC and SEC Chair Gary Gensler, the National Football League, 39 states, the District of Columbia and 145 tribal nations have filed amicus briefs urging the U.S. Supreme Court to take up a case over whether sports-based prediction market contracts qualify as swaps under federal law.

The filings, submitted last week, largely side with state regulators. They argue that sports-related prediction market products are gambling products that fall under state jurisdiction, not financial derivatives supervised by the Commodity Futures Trading Commission under the Commodity Exchange Act.

The push comes amid an unresolved circuit split. Two appellate courts have ruled that prediction markets touching sports are gambling products for state regulation, while one — the Third Circuit Court of Appeals — ruled 2-1 that the CFTC holds jurisdiction over swaps and prediction markets covering sports.

What do the amicus briefs argue?

Dodd, whose name appears on the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act at the center of the dispute, said in his brief that the law was never intended to give the CFTC authority to displace state governments and their power to regulate gambling.

His filing directly contested the Third Circuit's reasoning, drawing a line between derivatives as financial instruments and sports wagers. "Parlays that chain together multiple wagers — often on point spreads or player performances in different games, in different cities, in different sports — do not facilitate hedging or price discovery," the filing said. "Nor are they 'associated with' the type of 'potential financial, economic, or commercial consequences' required to qualify as swaps under the CEA."

Dodd also rejected the CFTC's claim to "exclusive jurisdiction" over these products. "Nor is the CEA's grant of 'exclusive jurisdiction' to the CFTC an express preemption provision immunizing every contract listed on a DCM from otherwise applicable state and tribal law. Rather, it identifies the CFTC as the federal regulator of covered financial instruments," his filing said.

Gensler, who played a key role in drafting the regulations implementing Dodd-Frank, made a parallel argument: the law did not grant the CFTC authority to preempt state gambling laws. He has advanced the same position in an appellate case.

The NFL argued it holds a vested interest in the outcome given the significance of sports betting to professional sports. The league criticized what it described as the CFTC's "laissez-faire" approach, and pointed to a broader divergence between how states regulate gambling companies and how the CFTC regulates designated contract markets — the license type held by prediction market providers.

How has the CFTC responded?

On Friday, the CFTC issued two proposals aimed at clarifying how these products fit the statutory definition of a "swap." One, an interim final rule, is already in effect.

Under the agency's interpretation, casino-style gambling falls outside the definition of a swap, but event contracts remain within it. The CFTC also proposes to formally classify contracts referencing sports, politics, cultural and weather-related events as event contracts that count as swaps — a move that would cement federal oversight over exactly the product categories the amicus filers want kept at the state level.

What happens next?

Kalshi, the prediction market operator at the center of the litigation, requested and received an extension to file its response to the Supreme Court. Its deadline now stands at Nov. 9, 2026.

The Supreme Court has not indicated whether it will hear the case. If it declines, the circuit split persists, leaving prediction market operators facing divergent regulatory treatment across jurisdictions. If it accepts, the Court will confront the question of statutory interpretation that Dodd, Gensler, the NFL, the states and the tribal nations have now framed in unison — whether event contracts on sports are financial instruments or wagers, and which level of government gets to police them.