Robinhood and others are moving into sports betting via federally regulated prediction markets. 1. Sports is the biggest near-term opportunity for prediction markets -- $120B+ bet annually in the US. 2. Kalshi (and soon Polymarket) have federal CFTC licenses. States regulate gambling and rely on its revenue, but can’t control CFTC-licensed markets. 3. The core is issue is federal preemption, i.e. does the Commodity Exchange Act of 1936 override state gambling laws? NV / NJ lost early suits; Maryland had an initial win in its case in August. Likely headed to the Supreme Court.