I’m trying to turn my Sunday Scaries into something productive. Here's what is meant to be a recurring feature: a roundup and analysis of the week that was and the week to come. I can’t promise this will be around forever or for long, but let’s give it a shot.
The biggest story last week for sports betting and prediction markets will no doubt bleed into this week as well.
As colleague Ryan Butler aptly summed it up: “A federal appeals court handed prediction markets a potentially consequential defeat Friday, ruling that sports event contracts are likely bets rather than federally regulated swaps and opening the door for Nevada to enforce its gaming laws against the exchange.”
Ah, of course, the famous Capulet v. Montague case pic.twitter.com/F0XoPTvSUj
— Geoff Zochodne (@GeoffZochodne) August 28, 2026
Why “potentially consequential,” you ask? Because the chief argument being made by prediction markets and their federal regulator, the Commodity Futures Trading Commission, is that it’s the CFTC and not the states that can tell PMs what to do.
If the states can call the shots, they could tell the exchanges to stop offering their sports-related event contracts. Those contracts are being traded all over the U.S., to the chagrin of states like Nevada that just see it as unauthorized and unwanted sports betting.
The U.S. Court of Appeals for the Ninth Circuit saw it similarly. The decision even went Shakespearean on prediction markets: “Just as ‘[t]hat which we call a rose by any other name would smell as sweet,’ … placing sports bets, even when called by another name, is still gambling.”
Friday's decision is a moot point in some ways. Kalshi's business has already been restricted in Nevada, Michigan, and Washington. Nevada and Washington are two of the nine states covered by the Ninth Circuit.
Perhaps even more potentially consequential is that the Nevada-Kalshi decision has created a split in the federal appeals judiciary. That is because the U.S. Court of Appeals for the Third Circuit already sided with Kalshi earlier this year against New Jersey.
“The [Commodity Exchange Act] preempts state laws that directly interfere with swaps traded on [designated contract markets],” that decision said. “Kalshi’s sports-related event contracts are swaps traded on a CFTC-licensed DCM, so the CFTC has exclusive jurisdiction.”
So where do you turn when two appeals courts are in disagreement? Is there a higher power, a supreme being, perhaps?
And there’s your circuit split. I’ll be arriving at One First Street at 5:00 am on the day of. https://t.co/QdzjdAUu2O
— Rob Schwartz (@FormerCFTCGC) August 28, 2026
(Schwartz is the former general counsel of the CFTC. One First Street is the address of the Supreme Court in D.C.)
Yes, it’s the U.S. Supreme Court. And it’s widely expected that’s where the giant legal war between states and prediction markets is heading.
In fact, we may see New Jersey ask SCOTUS this week for that final judgment. The court gave New Jersey until Sept. 3 (Thursday) to file its petition for writ of certiorari, a word I can’t pronounce but know means something along the lines of “hey, can you take a look at this?”
Which brings us full circle because if New Jersey wants SCOTUS to review its case, it will no doubt duly note that another federal appeals court ruled completely differently on the same subject.
All of the above is bringing us nearer to a SCOTUS ruling that could set out whether it is legal for prediction markets to continue offering sports-related event contracts for trading all over the U.S., which they've done since late 2024. Either “yes” or “no” will have huge consequences.
Welcome back. Here’s your free gut punch.
Football is so back. Betting on football is so back. And big, bad beats are back, too.
The scene: Saturday night, Hawai'i vs. Stanford. One last dart on the Hawai'i game is SOP for some college football bettors. And so more than a few people saw their fortunes swing on a fumble late in the fourth quarter that turned a Hawai'i cover into a Stanford one. Prayers up for ‘bow backers. Stanford bettors get nothing. You already got it.
STANFORD TAKES A FUMBLE TO THE HOUSE TO SEAL THE DEAL!
— Boomer’s Sportsbook (@betwithboomer) August 30, 2026
HAWAII WAS UP 27-23 WITH LESS THAN 2 MINUTES LEFT 🤯🤯 pic.twitter.com/zZiiyA2mx4
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You've been warned, pal
With its 11-2 victory over Nevada, Curaçao won its second Little League World Series title on Sunday.
If your reaction to that is any more invested than “huh, interesting,” then this next bit of news might be for you: “The chair of a Congressional subcommittee that has held two hearings about private equity’s influence in youth sports says he will look into the practice of adults gambling on the Little League World Series.”
ICYMI:
- NFL Strikes New ‘Official’ Sports Betting Deals, Sans Prediction Markets
- NFL Regular Season Poised to Send Prediction Market Volume Skyrocketing
- MLB Players Detail Sports Bettor Harassment: 'It's Become Ridiculous'
- MLBPA Supports Ban on Players Appearing in Sportsbook VIP Promotions
- Canadian Financial Regulators Pan Sports-Focused Prediction Markets
- Petitions to Legalize Online Sports Betting in Nebraska Make the November Ballot
Other news worth knowing:
– The new hotness for online sports betting companies that are also doing prediction markets is to put all of that business under the roof of a single, “super” app. In other words, an app where you could use a state-regulated sportsbook in a state where that’s legal, but that has prediction markets there for you should you cross into a sportsbook-less jurisdiction. Fanatics now appears to have gone super mode, per Aldrin Research’s Sahil Patel:
prediction markets added to the main @FanaticsSports app
— Sahil Patel (@sahildotcom) August 30, 2026
super app confirmed pic.twitter.com/v3tV1M2v5W
– Kalshi has already been restricting access in Washington after some legal losses in the state. However, the prediction market operator must still implement a multi-source geofencing system in Washington by this Wednesday, per a court order.
– The CFTC has warned prediction markets about using American odds, and gave them until the end August to rethink that kind of pricing display. As the CEO of Novig noted on Twitter, the exchanges are taking the warning seriously and removing the +/- odds. This is causing a bit of a stir among users, but, as Novig CEO Jacob Fortinsky said: "moving away from sportsbook-style odds is another step toward building a product that looks like what it is: a financial market." Remember: -110 = 52.38%.
– The "Midsummer Derby" was run at Saratoga this past weekend, the Travers Stakes. The 14-race card for the day generated an all-sources wagering handle of approximately $60.9 million. This year’s Travers Day handle (officially DraftKings Travers Day, which is why the Barstool crew was there) was the second-highest in the event’s history, trailing only 2024’s $63 million in betting. In other words, a pretty good day for horse racing. Perhaps related: I was at the 2024 Travers. That's right, horsepeople, Geoffrey Westside is worth millions to your sport.
Oh, and the Travers was won by a 10/1 longshot, Leading Change, who beat the two winners of this year’s Triple Crown races: Golden Tempo and Napoleon Solo. The Breeders' Cup Classic at the end of October is gonna be awesome.
– Novak Djokovic lost in the first round of the U.S. Open on Sunday night, which is the first time that's ever happened for the multiple major winner. The (definitely-not-100%) Djoker had been heavily backed to win a tournament that has a lot of question marks swirling around it, particularly with Jannik Sinner not participating. Oh, and the tennis tournament has reportedly partnered with Kalshi.
