Are bets placed through Kalshi, Crypto.com and Robinhood financial trades or simply online gambling?
The US Supreme Court could eventually answer that question as it considers whether to hear cases involving the three platforms and the fast-growing prediction market industry.
The dispute could determine how prediction markets, which let users put money on the outcome of sports and other real-world events, are regulated across the United States.
Prediction market operators argue their “event contracts” are financial derivatives and should be regulated at the federal level by the Commodity Futures Trading Commission.
A bipartisan group of US states disagrees. They argue that sports-related contracts amount to gambling and should be subject to the same state laws that govern sports betting.
The distinction matters.
If prediction markets are treated as financial products, they could operate under a single federal regulatory framework. If they are considered gambling, operators could face different licensing requirements, taxes, restrictions or outright bans across individual states.
Federal appeals courts have issued conflicting decisions, increasing the possibility that the Supreme Court will eventually settle the issue.
“The stakeholder interest in this controversy encompasses 50 states, hundreds of Native American tribes, hundreds of casinos, multi-billion-dollar financial exchanges, online sports betting companies and the federal government,” Florida sports lawyer Daniel Wallach said.
The Trump administration has backed prediction markets in the litigation.
Polymarket last year also received an investment from a venture capital firm backed by Donald Trump Jr., the president’s son.
The prediction-market fight is one of several major disputes the Supreme Court is considering adding to its new term, which begins next week.
Immigration detention
The Trump administration has asked the court to allow immigration authorities to detain certain non-US citizens without giving them an opportunity to seek release on bond, even if they have lived in the United States for years.
Immigration authorities argue such residents can be classified as “applicants for admission,” who are subject to mandatory detention while their cases proceed.
Federal appeals courts have largely rejected that interpretation.
Ten Commandments in schools
The court is also considering a challenge to a Texas law requiring public elementary and high schools to display the biblical Ten Commandments in classrooms.
Several Texas families backed by the American Civil Liberties Union argue the requirement violates constitutional protections involving government and religion.
A federal appeals court upheld the law.
The Supreme Court struck down a similar Kentucky law in 1980, but the current court has since abandoned the legal framework used in that decision and has taken a broader view of religious freedom.
Louisiana, Arkansas and Alabama have adopted similar Ten Commandments requirements.
The Supreme Court has not yet agreed to hear any of the three disputes. The justices are expected to announce some of the cases they will add to their docket as early as this week.