The National Football League (NFL) has formally urged the U.S. Supreme Court to resolve regulatory disputes over prediction markets, arguing that states—not federal agencies—are better positioned to oversee these platforms. In an amicus brief filed Thursday, the league supported New Jersey regulators in their legal battle against Kalshi, a prediction market operator, asserting that sports-related prediction contracts should fall under state gambling laws rather than federal oversight.
On the first Sunday of the NFL season, prediction markets saw $1.8 billion in trading volume tied to football, representing more than half of the total $3.3 billion traded that day. The NFL’s brief warned that the lack of clear federal guidance creates risks for consumer protection and game integrity, particularly for contracts tied to outcomes that could be manipulated, such as player injuries, officiating decisions, or individual player actions like missed field goals or fumbles.
Core Dispute: Federal vs. State Oversight
The NFL’s position centers on a jurisdictional conflict between the Commodity Futures Trading Commission (CFTC) and state regulators. The CFTC has claimed exclusive federal authority over prediction markets, arguing they function as financial exchanges. However, the NFL and state regulators contend that these platforms operate similarly to sports betting, which is traditionally regulated at the state level.
The league’s brief emphasized that prediction markets blur the line between financial speculation and gambling, raising concerns about:
- Manipulation risks tied to insider information (e.g., injuries, officiating calls).
- Age restrictions: Kalshi allows bettors as young as 18, while most states require a minimum age of 21 for sports betting.
- Lack of standardized protections for consumers and sports integrity.
Kalshi and CFTC Respond
Kalshi, a leading prediction market platform, disputed the NFL’s characterization, stating that its top priority is market integrity. The company highlighted partnerships with major sports leagues, including the NHL and Major League Baseball, as evidence of its commitment to responsible operations. Kalshi also noted that the CFTC has actively regulated sports-related markets, which are now listed on nearly every U.S. commodities exchange.
In a statement, Kalshi spokeswoman Elisabeth Diana said:
“Contrary to the NFL’s statements, the CFTC is actively policing sports-related markets, which are now listed on nearly every U.S. commodities exchange. The CFTC’s ongoing rulemaking addresses many of the NFL’s supposed concerns.”
The CFTC, for its part, has indicated it is engaged in rulemaking to address emerging issues in prediction markets but has not yet finalized specific regulations. The agency has also been in communication with the NFL regarding integrity concerns, though no formal agreement has been reached.
NFL’s Broader Stance on Betting
The league has taken a cautious approach to prediction markets, maintaining an advertising ban on these platforms while continuing partnerships with traditional sportsbooks like DraftKings and FanDuel. NFL Commissioner Roger Goodell has previously stated that the league prefers to wait for stronger protections before engaging with prediction markets, emphasizing that the NFL does not feel compelled to be an early adopter.
In its brief, the NFL argued that federal inaction—including the CFTC’s failure to ban certain high-risk contracts—has left gaps that could undermine sports integrity. The league specifically called out markets involving coaching decisions, officiating, and player injuries, which it views as particularly vulnerable to manipulation.
Legal and Industry Implications
The Supreme Court’s potential ruling could set a precedent for how prediction markets are regulated nationwide. A decision favoring state oversight would likely expand gambling-style regulations to these platforms, while a ruling in favor of federal control could solidify their status as financial instruments. The outcome may also influence how other sports leagues engage with prediction markets, particularly as trading volumes continue to grow.
For now, the dispute remains unresolved, with both sides awaiting the Court’s response to New Jersey’s request for clarity. The NFL has framed the issue as a matter of urgent consumer protection, while Kalshi and the CFTC argue that existing federal oversight is sufficient and evolving to address concerns.