The Ninth Circuit Court of Appeals has ruled against prediction markets, finding that sports-related event contracts are not swaps, according to CNBC. The decision directly contradicts an earlier ruling from the Third Circuit Court of Appeals issued in April.

At the center of the dispute is whether sports-related event contracts should be classified as swaps, a legal designation that carries significant regulatory implications for how such products can be offered and overseen. The Ninth Circuit concluded that these contracts do not fall into that category.

The ruling creates what is known as a circuit split, in which two federal appeals courts reach opposing conclusions on the same legal question. Such disagreements often serve as a trigger for the U.S. Supreme Court to take up a case in order to resolve the conflict and establish a uniform national standard.

As CNBC reported, the contradiction between the Ninth Circuit and the Third Circuit sets up a likely fight at the Supreme Court. Until the nation’s highest court weighs in, the legal status of these contracts could remain uncertain across different parts of the country.

The outcome carries weight for the fast-growing prediction markets sector, which offers contracts tied to real-world outcomes, including sporting events. How courts ultimately classify these products will help determine the regulatory framework under which they operate.