State Attorneys General Expect Supreme Court to Rule on Sports Prediction Markets by 2027

State attorneys general expect the sprawling legal fight over sports event prediction markets to reach the U.S. Supreme Court as early as 2027, with several officials pointing to a looming split among federal appeals courts as the trigger that will send the dispute to the nation’s highest court. The comments, made during a panel at the National Council of Legislators from Gaming States’ summer meeting, mark one of the clearest public timelines yet from officials overseeing the multistate litigation against platforms like Kalshi.

At issue is whether prediction market operators offering sports-related event contracts can rely on federal commodities law to bypass state gambling regulations, or whether those contracts amount to unlicensed sports betting subject to state licensing, taxation, and consumer protection rules. The fight has already spread across more than a dozen states and multiple federal circuits, drawing comparisons to past multistate legal campaigns against tobacco and opioid companies.

A Circuit Split Years in the Making

West Virginia Attorney General JB McCuskey told the NCLGS panel that a Ninth Circuit ruling in Nevada’s case against Kalshi could be the decision that creates the type of appellate conflict the Supreme Court typically steps in to resolve. “I think probably next term would be a very ripe time for that to take this on,” McCuskey said, adding that “with the amount of money that’s going through this, I feel pretty confident that the Supreme Court’s going to weigh in probably sometime in 2027.”

The Ninth Circuit heard oral arguments in April in a consolidated set of cases pitting Nevada against Kalshi, Crypto.com, and Robinhood Derivatives, with judges appearing skeptical of the platforms’ argument that sports event contracts are federally regulated swaps beyond the reach of state gaming law. That skepticism stands in contrast to a favorable ruling Kalshi secured from the Third Circuit in its dispute with New Jersey, according to Craig Newby, Nevada’s first assistant attorney general, who said a divergent Ninth Circuit outcome would leave the Supreme Court as the only venue capable of resolving the underlying preemption question. Additional cases remain pending in the Fourth and Sixth Circuits, including a consolidated matter set for oral argument before the Sixth Circuit later this month, further raising the odds of conflicting appellate rulings.

A Broad, Bipartisan Coalition

The scope of the multistate response has grown substantially over the past year. Brian Kane, executive director of the National Association of Attorneys General, said more than 40 attorneys general signed a comment letter submitted to the Commodity Futures Trading Commission, while dozens of states have joined amicus briefs backing enforcement actions in Nevada, Massachusetts, Ohio, and elsewhere. Kane framed the cooperation as bipartisan and rooted in preserving state authority rather than opposition to the platforms themselves.

That coalition has already produced tangible results in some jurisdictions. Massachusetts remains the only state to win a court injunction restricting Kalshi’s sports offerings to date, while Ohio gaming regulators fined the company $5 million after a federal district court ruled its sports-event contracts were not swaps under the Commodity Exchange Act. Nevada, meanwhile, is currently the only state enforcing an active, court-ordered ban on Kalshi’s sports contracts, after a state judge found the company’s wording for sports wagers “indistinguishable” from a bet placed at a licensed sportsbook.

What’s Actually at Stake

The dispute has become the most significant legal challenge facing the regulated U.S. sports betting industry since the Supreme Court struck down the federal ban on sports wagering in 2018. Prediction market operators argue the Commodity Exchange Act grants the CFTC exclusive jurisdiction over event contracts traded on federally registered exchanges, preempting state gambling statutes entirely. States counter that allowing that argument to stand would gut decades of state-level gaming regulation, licensing revenue, and consumer protection frameworks built around legal sports betting markets.

The CFTC itself has taken an active role defending the platforms, with agency leadership publicly stating its intent to support prediction market operators against state enforcement and filing amicus briefs arguing that states cannot “invade” the commission’s exclusive jurisdiction by recharacterizing federally regulated swaps as illegal gambling. That stance has put the federal derivatives regulator squarely at odds with state gaming boards and attorneys general nationwide, a dynamic officials say only strengthens the case for eventual Supreme Court intervention.

With high court action still viewed as at least a year away, state attorneys general say they intend to keep leading the fight in the meantime, continuing to file suits, cease-and-desist orders, and amicus briefs while the appellate courts work through the underlying jurisdictional questions. For an industry that has already reshaped how millions of Americans bet on sports outside traditional sportsbook promo markets, the coming year of appellate rulings could determine whether prediction markets operate under a single federal framework or remain subject to a patchwork of state gambling laws.