TD Cowen: Despite CFTC Intervention, State Governments Hold Advantage in Legal Disputes Over Prediction Markets

Odaily News Investment bank TD Cowen stated that in the legal disputes surrounding sports prediction markets, even with the U.S. Commodity Futures Trading Commission (CFTC) stepping in to support related platforms, state governments may still hold a more favorable legal position.

Analysts pointed out that sports betting has long been primarily regulated by state-level agencies, and the Supreme Court often places significant weight on historical regulatory precedents in similar cases. Therefore, in the dispute between Crypto.com and the state of Nevada, the state government's stance still holds a certain advantage.

The case originated from Nevada regulators determining that the sports event contracts offered by Crypto.com constituted unlicensed gambling activities and attempted to halt them; Crypto.com argued that its products are derivative trades regulated by the CFTC. Previously, a district court sided with Nevada's position, and the case is currently under appeal at the Ninth Circuit Court of Appeals. The CFTC recently filed an amicus curiae brief, emphasizing that prediction markets should be regulated at the federal level.

TD Cowen believes that if the case ultimately reaches the Supreme Court, legal uncertainty regarding the regulatory authority over prediction markets could persist for years.