Attorneys General From 39 States, Including Nevada, Ask the Supreme Court to Settle the Prediction Market Fight

What happened

Attorneys general from 39 states, including Nevada, along with the National Football League, want the U.S. Supreme Court to rule on prediction markets, KTNV Channel 13 reported. These are sites such as Kalshi, Polymarket and Robinhood that let people put money on outcomes, including sports events.

The central question is who should regulate these sites: the states or the federal government. Nevada officials told KTNV that millions of dollars in gaming tax revenue and protections for consumers depend on the answer.

Why Nevada says the sites are gambling

Nevada gaming regulators argue that these sites are accepting sports bets without following the rules that licensed sportsbooks must meet. The companies say they are not sportsbooks. They describe themselves as federally regulated financial markets that fall under the Commodity Futures Trading Commission.

Regulators push back on the federal argument

Nevada Gaming Control Board Chairman Mike Dreitzer told KTNV that Congress did not intend the Commodity Exchange Act to cover sports wagers. He said the law is meant for products like corn and soybean futures that companies use to hedge financial risk. "Sports bets are not commodity derivatives. They are for entertainment," Dreitzer said.

KTNV reported that Rep. Dina Titus agrees with Dreitzer that the law was not written that way. Nevada Attorney General Aaron Ford said states have spent decades building safeguards for gamblers. "We are the gold standard when it comes to gambling and gaming," Ford previously told Channel 13.

Industry groups point to marketing

Tres York, representing the American Gaming Association, told Nevada lawmakers in August that the sites present themselves differently depending on the audience. "To the public, they willingly admit they are," York said, referring to sports gambling, during the Joint Interim Standing Committee on Revenue.

What is at stake for the state

According to KTNV, Nevada collects about $1.1 billion a year in gaming taxes. Regulators argue that if sports betting moves to prediction markets that are not taxed like sportsbooks, the state could lose money that helps pay for public services.

During a previous Nevada Gaming Control Board meeting, George Assad said tax dollars lost through Kalshi and other prediction markets would affect funding for public education, roads, housing and Medicaid. Regulators have also raised concerns about underage gambling, money laundering protections, problem gambling, dispute resolution and insider knowledge leading to unfair bets.

The federal picture

A new CFTC rule

The CFTC says prediction markets should be treated as swaps, a type of financial exchange, KTNV reported. On Friday, the agency announced an Interim Final Rule. It codifies the agency's position that casino-style gambling products, including sportsbook wagers and casino games, are excluded from the swap definition. "Casino-style gambling products are not derivatives," CFTC Chairman Michael S. Selig said in a statement.

Split court rulings

In August, a federal appeals court sided with Nevada, ruling that placing sports bets is still gambling no matter what it is called. A federal court in New Jersey took the opposite position, KTNV reported. The attorneys general and the NFL are asking the Supreme Court to settle the issue nationwide.

In a court filing, the NFL said uneven regulation across the country can "pose real challenges to game integrity and consumer protection." KTNV also noted that President Donald Trump has said it is "critically important" for the CFTC to have exclusive authority over prediction markets.

Ties to the Trump family

KTNV reported that Donald Trump Jr. is an investor in Kalshi and an unpaid adviser to the company, and a paid adviser to Polymarket. His investment company, 1789 Capital, has also invested in Polymarket. KTNV said it contacted Kalshi for comment.

What to watch next

• Kalshi has until Nov. 9 to file its response in the Supreme Court case, according to KTNV.
• The Supreme Court is not expected to decide whether it will take the case until December.
• How the CFTC's new Interim Final Rule on casino-style gambling products affects the dispute between states and prediction market companies.