The National Football League (NFL) has formally petitioned the US Supreme Court to intervene and halt sports betting contracts on prediction market platform Kalshi. The NFL filed an amicus brief supporting New Jersey’s appeal challenging the legality of Kalshi’s platform. The league’s legal move escalates a jurisdictional showdown, drawing 39 states, the District of Columbia, and former financial regulatory chiefs into a unified front of opposition.
The dispute stems from conflicting court rulings across jurisdictions. The Third Circuit previously favored arguments classifying Kalshi’s contracts as “swaps” under the federal Commodity Futures Trading Commission (CFTC). On the opposing side, appeals courts in the Sixth and Ninth Circuits ruled that similar instruments constitute pure gambling activities subject to state regulations.
Not Risk Hedging, but Pure Gambling
Represented by former US Attorney General William Barr, the NFL presented core arguments highlighting the intent of the Dodd-Frank Act. The filing asserts that the statutory definition of swaps was designed purely as a vehicle for hedging against real-world risks. The NFL argued that prediction market instruments do the exact opposite: creating wagering contracts that introduce new risks into the market.
The league’s concerns center on the vulnerability of game integrity. The NFL underscored loopholes on prediction platforms where game outcome contracts risk being manipulated. Potential misconduct could involve actors directly on the field, ranging from players and coaching staff to game officials.
Regulatory Limitations and Age Restrictions
The league’s amicus brief also criticized disparities in consumer protection standards. Kalshi permits users aged 18 to trade. This lower age threshold departs from the minimum age requirement of 21 across most state gambling laws. The NFL also highlighted the CFTC’s limited resources, arguing that it is difficult for an agency with a staff of just 543 to oversee national market operations.
The risks of weak oversight were immediately evident in the money flowing during the opening Sunday of the NFL season. American football contracts accounted for $1.8 billion in trading volume. That volume dominated the total $3.3 billion transacted across prediction platforms that day.
The massive scale of money at stake has united policymakers. A total of 39 states signed a joint support brief alongside the District of Columbia and former Securities and Exchange Commission (SEC) and CFTC chair Gary Gensler, opposing the treatment of sports contracts as federal exchange products. If the Supreme Court sides with federal status, state governments would lose the authority to regulate billions of dollars flowing from their residents.
Reported via Decrypt.
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