Crypto.com, Robinhood Push SCOTUS to Rule on Federal Control Over Prediction Markets

Crypto.com is pressing the U.S. Supreme Court (SCOTUS) to declare that federal law preempts state gaming rules on sports contracts—even as partner Robinhood (NASDAQ: HOOD) urges the justices to pause the case.

Following conflicting prediction market rulings in the Third and Ninth Circuits, Crypto.com and Robinhood petitioned the Supreme Court to step in. The platforms are seeking a definitive ruling on whether the Commodity Exchange Act (CEA) prevents states from regulating sports derivatives.

The platforms are seeking to centralize regulatory oversight under the Commodity Futures Trading Commission (CFTC), the federal agency governing prediction markets.

In short, Crypto.com and Robinhood are leaning into federal preemption in their SCOTUS petitions. That effort is likely rooted in the notion that the CFTC’s jurisdiction over prediction market operators supersedes any authority the states claim to have.

Seeking Elusive Legal Clarity

Crypto.com and Robinhood—which recently partnered after the latter took an equity stake in Crypto.com’s derivatives unit—are pointing to the Commodity Exchange Act (CEA) as the definitive solution to the industry’s regulatory ambiguity.

Signed into law by President Franklin D. Roosevelt in June 1936, the CEA serves as the statutory backbone for both the CFTC and U.S. commodities markets.

Prediction market operators argue the CEA applies to sports event contracts because the statute defines a “swap” as any contract dependent on the “occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence.”

Legal experts and state regulators counter that interpretation, arguing Congress never intended the CEA to strip states of their traditional police powers over sports gambling.

Forecasting the High Court’s Next Move

The Supreme Court has yet to decide whether it will take up the petitions. While Crypto.com is pressing for an immediate ruling on preemption, Robinhood has urged the justices to wait until the CFTC completes its ongoing rulemaking process for sports contracts.

If SCOTUS agrees to hear a consolidated case, legal analysts suggest arguments could take place by late 2026 or early 2027. Regardless of timing, a high court ruling remains the only mechanism capable of delivering binding national clarity for operators, investors, and state regulators alike.