A lot can happen in a week.
Take the Los Angeles Rams, for example. They've gone from looking like a Super Bowl-bound “super” team with a genius travel plan to, well, just another contender following their trip to Australia.
And so it goes with prediction markets and the constant legal developments swirling around the federally regulated exchanges.
- Robinhood and New Jersey regulators have now asked the U.S. Supreme Court to weigh in on the legality of sports prediction markets.
- Kalshi is also seeking a Ninth Circuit rehearing, arguing the ruling conflicts with another federal appeals court and could expose it to state enforcement.
- Meanwhile, other states, including Michigan, Iowa, and Utah, are restricting or challenging prediction markets.
Case in point: Last Friday, there was one pending request for the U.S. Supreme Court to weigh in on the legality of sports-related event contracts offered by prediction markets for trading. This Friday, there are two.
The second petition for a writ of certiorari to the Supreme Court was not filed by a state, as the first one was by New Jersey sports betting regulators. Instead, it was filed by Robinhood in response to another federal appeals court’s ruling late last month that sports event contracts are sports betting, not federally regulated “swaps.”
“The Supreme Court now has the opportunity to provide clarity on the regulation of prediction markets, which we believe rightly sits with the U.S. Commodity Futures Trading Commission (CFTC),” a Robinhood spokesperson told Bloomberg Law. “It’s our position that the Court should review these cases collectively as we seek to ensure every eligible customer has access to these markets as a tool to aggregate dispersed information, hedge risk, and speculate on their beliefs about future events.”
Whether the Supreme Court takes up Robinhood’s case or New Jersey's remains to be seen. SCOTUS selects relatively few matters for review, and the prediction market-related litigation is technically not yet on the merits but rather on whether the exchanges can be restricted while lower courts continue considering the underlying issues.
Yet Robinhood’s request is not the only effort at getting someone to take another look at the Ninth Circuit appeals court ruling. Kalshi on Wednesday filed a petition for a rehearing and rehearing “en banc,” meaning all the appeals court judges.
JUST IN: Instead of appealing to SCOTUS, @Kalshi has asked the full Ninth Circuit to review ("en banc") its case against Nevada. This comes after Kalshi lost with the appeals panel, which ruled 3-0 that Nevada can regulate the prediction site like gambling.
— Marshall Cohen (@MarshallCohen) September 9, 2026
Kalshi argued a rehearing is needed because the Ninth Circuit's decision “creates a circuit split on an exceptionally important question of federal preemption."
The Ninth Circuit's decision in Nevada's favor clashes with the ruling of the Third Circuit against New Jersey, the company noted.
Among other things, Kalshi also said the decision ignores the “fundamental” difference between state-regulated online sports betting (“where the house - or bookie - sets the odds and wins when the bettor loses”) and sports event contract trades (“where the market sets the value of the trades,” and the federally regulated prediction market “neither sets the odds nor wins when traders lose”).
“The former, including their modern incarnations, remain fully subject to state regulation,” Kalshi said. “But Congress placed the latter squarely within the exclusive regulatory oversight of the CFTC.”
Kalshi claims it is now exposed to both civil and criminal liability, “even though it is abiding by federal law and the mandate of its exclusive federal regulator.”
No days off
So the two efforts could be key to keeping sports prediction markets up and running in the Ninth Circuit’s jurisdiction, which includes the massive and legal sports betting-less market of California.
That news in and of itself is big. And yet they are not the only legal developments this week, as states and prediction markets continue to scrap over the legality of sports event contracts across the U.S.
While prediction market operators and the CFTC maintain the trading of those contracts is a purely federally regulated business, gambling regulators in more than 20 states view them as unlicensed or illegal sports betting.
The Michigan Gaming Control Board officially announced that Robinhood has agreed to cease offering new sports event contracts in the state by end of day today. While the agreement "does not concede any party's legal position," two PMs are now restricted in MI: RB and Kalshi. pic.twitter.com/63BwMh4CqJ
— Geoff Zochodne (@GeoffZochodne) September 9, 2026
On Wednesday, the Michigan Gaming Control Board (MGCB) announced Robinhood agreed to stop offering new sports-related event contracts in the state, and to close out lingering customer positions by Oct. 9.
“The agreement does not concede any party’s legal position - it preserves both sides’ rights and defenses, including Robinhood’s argument that its federally structured contracts are not subject to state regulation,” the MGCB said “The agreement will remain in effect until the Sixth Circuit appeals are resolved.”
Michigan (along with Nevada and Washington) has restricted prediction markets prior to any SCOTUS ruling. Robinhood's agreement to stand down in Washington follows restrictions that were imposed on Kalshi in the state earlier this year.
Illinois Attorney General quickly files the Iowa federal court decision against KalshI as supplemental authority to support its opposition to the still-pending motions for preliminary injunction filed by KalshI, Coinbase, and the CFTC against Illinois. pic.twitter.com/oVPyjTiNhn
— Daniel Wallach (@WALLACHLEGAL) September 9, 2026
There are other states seeking their own restrictions on prediction markets, though.
Some of those efforts could be accelerated by decisions already made. Indeed, when a legal decision is rendered somewhere, it can show up somewhere else entirely, with prediction market operators and states pointing to it as proof of their respective positions.
On Tuesday, Kalshi was denied a preliminary injunction against Iowa. In rejecting the request, the federal judge wrote that “the Court concludes that Kalshi is unlikely to succeed on the merits of its argument that the Commodity Exchange Act preempts Iowa gambling laws and regulations.”
The Iowa decision noted the Ninth Circuit ruling a few times.
“Kalshi should have known all along that its sports-related event contracts might be interpreted by state regulators as sports gambling; indeed, the company has characterized itself in an advertisement as 'the first app for legal sports betting in all 50 states,'” says one passage, which cites the Ninth Circuit's decision.
Also on Tuesday, Kalshi was denied an emergency injunction pending appeal by the U.S. Court of Appeals for the Tenth Circuit. That request had to do with Utah, where Kalshi is trying to fend off the state from pursuing enforcement action.
The state’s constitution does not permit gambling, and Utah Attorney General Derek Brown has said he intends to enforce that ban.
“Gambling is gambling no matter what any company calls it,” Brown said last month.
