The legality of prediction markets and the platforms’ foray into sports could be heading to the Supreme Court by next summer. A leading prediction market executive sees a case making it to the High Court before the end of the year.
The industry has been locked in legal battles over the last two years with gaming regulators in both state and federal courts.
Flip Pidot has worked in the industry for almost two decades and is now chief strategy officer at PredictIt. He said it’s just a matter of time before justices take up the issue.
“When you have a high-stakes intergovernmental conflict where a federal regulator like the CFTC is opposed in their position to a supermajority of state attorneys general … then that can get the Supreme Court’s attention,” Pidot told Fortune.
Nevada Points To Kalshi Accepting State Tax in North Carolina
Prediction market firms are circumventing state gaming laws, numerous states allege. They have pushed that issue in court over the last several months. Prediction markets argue that their offerings are different from traditional sports betting. They contend they are regulated solely at the federal level by the Commodity Futures Trading Commission (CFTC).
In recent months, the CFTC has attempted to assert its control over the industry. It has filed lawsuits against several states, including against New York in April.
Kalshi has appealed two cases to two different circuit courts. If either of those rule against the company, this could create a split at the circuit court level and may bring Supreme Court consideration.
At a Prediction Markets x Institutional Adoption conference on Aug. 18, Pidot said he expected the Supreme Court to take up the issue in November, with a ruling coming next June.
Nevada made an interesting argument at the 9th Circuit Court of Appeals recently. Senior Deputy Attorney General Abigail Pace pointed to Kalshi’s “embrace” of a North Carolina bill. It imposes a 6% tax on fees earned by prediction markets. She said it “undermines its own arguments at every turn” and “confirms that states have the authority to regulate sports-, election-, and entertainment-related event contracts.”
The argument is that accepting taxation by a state equates to regulation at the state level.
Nevada tells 9th Circuit that Kalshi’s “embrace” of NC bill imposing a 6% tax on fees earned by prediction markets “undermines its own arguments at every turn” and “confirms that States have the authority to regulate sports-, election-, and entertainment-related event contracts.” pic.twitter.com/TC4P6WO8EA
— Daniel Wallach (@WALLACHLEGAL) August 22, 2026
Kalshi Raises $1.12B
In other prediction market news, Kalshi disclosed a $1.12 billion fundraising round this week to the Securities and Exchange Commission. The company is currently privately held and valued at $22 billion. Some in the financial industry expect an initial public offering in 2027 or 2028.
“A company of our financial profile with the rate of growth that we’re seeing, that sort of conversation has to happen,” Kalshi CEO Tarek Mansour told CNBC.
“People start asking that question. And we’re basically thinking about it, but obviously, we don’t have an answer yet.”
