It’s unclear if the Supreme Court will take up this case, but every lawyer I’ve spoken to for the past year thinks that SCOTUS will take up a prediction market case, likely within the next year. To somewhat overly simplify the stakes: if a majority of the justices agree that sports-related prediction markets are just gambling products, all of the companies offering these products will need to secure state licenses and approvals, and pay taxes in each state they operate in. On the other hand, if a majority of the justices agree that these are swaps that are properly overseen by the Commodity Futures Trading Commission, there will be significant implications for states and pure play sports betting firms.
Breaking it down
New Jersey asked the U.S. Supreme Court to evaluate whether the Dodd-Frank Wall Street Reform and Consumer Protection Act preempts state regulations around gambling, if the products in question are offered on federally regulated designated contract markets.
What the Supreme Court really needed was a circuit court split, several lawyers following prediction market cases told CoinDesk, and that exists now after last month’s Ninth Circuit Court of Appeals ruling.
New Jersey was already entitled to appeal the Third Circuit ruling from this past April to the Supreme Court, but the split gives the issue more momentum, said Carl Kennedy, a partner at the law firm Katten who co-chairs its financial markets and regulation group.
