Blockchain.com is applying for Commodity Futures Trading Commission (CFTC) licenses to offer event contracts. The push comes two weeks after a second federal appeals court ruled that states can treat sports contracts as gambling.Event contracts are tradable bets on whether something will happen, from a Federal Reserve rate decision to the outcome of an NFL game. To list them legally in the US, a venue needs to be approved by the CFTC as a designated contract market, or DCM.According to law firm K&L Gates, the agency has cleared 12 new DCMs since the start of 2025, and 14 more applications were still pending as of late August. That’s the queue that Blockchain.com is joining.A market that grew 21 times in a yearPrediction-market volume hit about $188 billion in the third quarter of 2026, up almost 70% from the previous quarter and about 21 times the level of a year earlier.Most of that growth is powered by Kalshi, which leads the market by a significant margin. Sports contracts make up around 40% of Kalshi’s quarterly turnover.Open interest in Kalshi is currently $1.59 billion, while its nearest rival, Polymarket, has over $679 million.In September, Cryptopolitan has reported that Kalshi now controls about 96% of non-sports volume across the two platforms, helped by distribution through Robinhood, Coinbase, Webull and Moomoo.Courts split on who gets to regulateThe market that Blockchain.com is walking into is already riddled with fights over who holds regulatory authority.On September 25, the 6th US Circuit Court of Appeals in Cincinnati ruled that Ohio and Tennessee can apply their gambling laws to event contracts.Various courts have already issued varying judgments on the same matter, with the 9th Circuit finding Kalshi’s contracts fall under Nevada’s gambling laws, while the 3rd Circuit held that New Jersey’s rules do not apply.These disagreements raise the odds that the matter may get a defining moment at the Supreme Court.Various states have also filed lawsuits against Kalshi, Polymarket and a few other prediction market platforms.New York Governor Kathy Hochul said the state sued Polymarket in late September, calling it an unlicensed gambling operation that put residents, especially minors, at risk. Polymarket said it would fight for its users.The CFTC is fighting to keep controlThe CFTC holds the federal oversight to regulate these markets, and it claims that it holds the sole authority in the market. These have led to a clash with states that challenge that claim.In May, the agency filed a brief arguing that federal derivatives law overrides state rules applied to CFTC-regulated exchanges. A June rulemaking proposal would rewrite its event-contract rules, define what counts as gaming, and set out when a contract runs against the public interest.On September 22, staff issued guidance flagging manipulation risk in contracts whose settlement a single named person can influence.CFTC Chairman Mike Selig said in a post, “You cannot regulate an exchange like a casino and expect the same protections as a federally regulated market,” adding that prediction markets should meet the standards applied across US finance.The pressure is building elsewhere too. On Thursday, October 8, the NFL filed an amicus brief urging the Supreme Court to classify sports event contracts as gambling rather than swaps in Flaherty v. KalshiEX. It also asked the court to allow states to regulate prediction markets.Kalshi does not agree with the NFL’s position, as it says that the CFTC already polices sports markets. The court has not agreed to hear the case.The outcome of that filing matters to a new entrant like Blockchain.com. State-level regulation could raise licensing and compliance costs and thin out liquidity. Bernstein has projected annual volume could reach $10 trillion by 2035 but does not expect US regulatory clarity before 2027 or 2028.If you're reading this, you’re already ahead. Stay there with our newsletter.