• The Third Circuit ruled 2-1 that the CFTC has jurisdiction over swaps and sports-related prediction markets, per CoinDesk; two other appellate courts, which CoinDesk does not name, went the other way.
• Kalshi's response in Supreme Court docket 26-299 is due Nov. 9, 2026 after an extension, and the Court has not said whether it will hear the case.
• On Oct. 9, 2026 the CFTC issued a proposal to define event contracts, including sports, political, cultural and weather contracts, as swaps; the comment window is 30 days from Federal Register publication.
• CoinDesk reports that most amicus briefs, including from 39 states, the District of Columbia and 145 tribal nations, urge the Court to side with the states.
• Until a court or Congress settles the question, payment partners and banks serving these venues carry state-by-state jurisdictional risk.

Sports prediction markets are heading toward a Supreme Court test, but the Court has not yet agreed to hear one. CoinDesk reported on Oct. 11, 2026 that docket 26-299, whose filenames refer to Flaherty v. Kalshi, is pending, with Kalshi's response now due Nov. 9, 2026 after an extension. Two days earlier, the CFTC proposed a rule to classify event contracts as swaps. The open question is whether such contracts fall under federal derivatives law or state gambling law.

The circuit split behind the docket

Appellate courts have given opposite answers on the same product. CoinDesk reports that a Third Circuit panel ruled 2-1 that the CFTC has jurisdiction over swaps and sports-related prediction markets, while two other appellate courts held that markets touching sports are gambling products for states to regulate. CoinDesk does not name those two courts or their cases. A conflict among circuits is a conventional ground for Supreme Court review, though the Court decides for itself whether to take a case.

Who is lining up on each side

Most amicus briefs urge the Court to side with the states, according to CoinDesk. Former Sen. Chris Dodd wrote that the Commodity Exchange Act's grant of exclusive jurisdiction to the CFTC is not an express preemption provision. Former CFTC and SEC Chair Gary Gensler argued the law does not let the CFTC preempt state gambling laws. The NFL said it has a vested interest and criticized the CFTC's approach. CoinDesk lists 39 states, the District of Columbia and 145 tribal nations among the amici.

The CFTC moves before the justices do

On Oct. 9, 2026 the CFTC announced a proposed rule that would define event contracts, including sports, political, cultural and weather contracts, as swaps; comments are due within 30 days of Federal Register publication. Chairman Michael S. Selig called the products commodity derivatives within the agency's exclusive jurisdiction. CoinDesk adds that a companion interim final rule, now in effect, places casino-style gambling outside the swap definition. The CFTC release itself does not mention the interim rule or any court.

What operators and counterparties should watch

The practical exposure is jurisdictional rather than commercial. A regulatory proposal does not bind courts, so a venue's ability to list sports contracts may still depend on where a dispute is heard. Payment processors, banks and brokers serving these venues should watch three events: Kalshi's Nov. 9 response, whether the Court grants review, and how the CFTC's proposal changes after the comment period. Until then, counterparties should assume state-level enforcement risk persists.