Earlier this month, prediction market platform Robinhood filed a petition for certiorari with the Supreme Court regarding the Ninth Circuit Court of Appeals 3-0 ruling, which supports states’ rights to enforce their gambling laws against sports event contracts. Now, Robinhood is requesting that SCOTUS hold off on granting certiorari while the CFTC finalizes its sports-contract rulemaking.
In a thread posted by gaming attorney Daniel Wallach on Monday (one which includes highlighted snippets from Robinhood’s latest request to the Supreme Court), the exchange urges SCOTUS to pause any ruling that might grant certiorari.
“Granting certiorari now would be premature,” says Robinhood in its formal legal filing. “The CFTC is currently engaged in rulemaking, and the forthcoming rule will provide significant clarity to courts, market participants, and state regulators. Many cases remain in the pipeline.”
On June 10th, the CFTC published a formal Notice of Proposed Rulemaking on sports contracts. While some of the language within the proposal focuses on the less controversial prohibition of catastrophe-based prediction markets, the federal agency’s eventual guidance on how to categorize and regulate sports event contracts will face far more scrutiny.
Now that the phase for receiving public comments related to the NPRM has expired, the CFTC is in the process of establishing rules that will, in the agency’s view, adequately provide a framework for the modern-day, federal oversight of prediction markets, including those linked to sports outcomes.
“The CFTC’s forthcoming rule will provide significant clarity to the market and state regulators regarding the CFTC’s understanding of ‘swaps’ and the kinds of event contracts that the CFTC views as contrary to the public interest under the Special Rule,” stated Robinhood in its legal communication with the Supreme Court.
The new CFTC rules aren’t expected to be published until late this year at the earliest, with some projections aiming at an early 2027 timeline. If SCOTUS agrees that it should wait for the CFTC’s updated rules on sports contracts before granting certiorari, the earliest possible date that the nation’s highest court would hear one or more prediction market cases would be pushed back until mid-2027.
In a recent article published by CoinDesk, Wallach suggested that states and tribes are likely to sue the CFTC regardless of the wording contained within the agency’s new prediction market rules. “Whatever the final rule ends up being will likely be challenged under the Administrative Procedure Act,” stated Wallach. “Which could signal to the Supreme Court that the issue is ‘unripe for review.’”
Given all the moving parts of the continuing legal battle between prediction markets and state and tribal gaming authorities, a Supreme Court showdown could be pushed all the way to 2028. That, of course, is assuming that SCOTUS ultimately decides to hear one or more cases linked to sports contracts, which many legal experts believe is close to certain.
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