The NFL has sided with states in a Supreme Court dispute over sports prediction markets, filing an amicus brief Thursday in support of New Jersey's appeal of a Third Circuit ruling that exempted Kalshi's sports contracts from state gambling oversight.
The Third Circuit had determined that Kalshi's sports event contracts qualify as "swaps" under the Commodity Futures Trading Commission's exclusive jurisdiction, placing them outside state gambling regulation. However, the Sixth and Ninth Circuits have ruled differently, creating a circuit split that only the Supreme Court can resolve.
NFL's Specific Concerns
In its brief, the NFL outlined several safeguards it requested from the CFTC and prediction market operators that were declined. These include bans on easily manipulated contracts, contracts involving injuries or officiating decisions, and contracts with predetermined outcomes. The league also expressed concern that 18-year-olds can trade on Kalshi while most states require sports bettors to be 21.
The brief noted that NFL-related contracts accounted for $1.8 billion of the $3.3 billion traded across prediction markets on the season's first Sunday. The NFL also argued that the CFTC's approximately 543 employees nationwide may be insufficient to police these markets effectively, and that operators' insider-trading policies lack the league-specific prohibited bettor lists needed for meaningful enforcement.
Broader Legal Landscape
The NFL's position aligns with the Sixth and Ninth Circuits' interpretation of Dodd-Frank, arguing that the law's definition of swaps covers instruments that hedge existing risk, not bets that create new risk. This distinction places sports contracts under state gambling oversight rather than federal commodity regulation.
Sports gaming attorney Daniel Wallach said the brief "meaningfully increases the chances of a cert grant." The NFL, represented by former U.S. Attorney General William Barr, seeks a ruling before the 2027 season.
Conditional Next Steps
If the Supreme Court upholds the Third Circuit ruling, the NFL stated it would pursue stronger integrity and consumer protections through persuading the CFTC, operators, and Congress rather than seeking to eliminate prediction markets entirely.
Other major sports leagues have taken different approaches. Major League Baseball named Polymarket its exclusive prediction market sponsor and signed an integrity agreement with the CFTC, while the NHL became the first major league to license its trademarks to prediction markets. DraftKings and FanDuel have also launched their own prediction market offerings.
