Nikolas Sargeant
TL;DR
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The NFL argues that sports prediction contracts are gambling and should remain subject to state regulation.
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The dispute concerns whether federal CFTC oversight prevents states from enforcing their gambling laws.
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The NFL wants stronger safeguards covering vulnerable contracts, age limits, and insider information.
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Kalshi rejects the league’s position, arguing that federal regulation provides consistent oversight and protects market integrity.
The National Football League is backing New Jersey regulators in a legal dispute over sports prediction markets, arguing that their contracts should not be shielded from state gambling laws by federal derivatives regulation.
In an amicus brief filed with the U.S. Supreme Court in Flaherty v. KalshiEX, LLC, the league urged the justices to hear the case and resolve growing disagreement among courts.
The dispute could shape whether platforms such as Kalshi can offer sports contracts nationwide under Commodity Futures Trading Commission oversight or must also comply with state gambling restrictions.
NFL Says Sports Contracts Differ From Financial Swaps
The NFL argues that sports prediction contracts are not financial swaps falling within the CFTC’s exclusive jurisdiction.
Drawing on reasoning from the Sixth and Ninth Circuits, the league said traditional swaps hedge an existing financial risk. Sports contracts, it argued, instead expose consumers to outcomes in which they have no underlying financial interest.
That distinction forms the basis of its position that states should retain authority to regulate the products as gambling.
The filing asks the Supreme Court to take up the dispute; it does not establish that the court has agreed to hear the case.
The NFL pointed to substantial trading activity to illustrate the stakes. According to the league, nearly $2 billion of the $3.3 billion traded across prediction markets on the first Sunday of the NFL season was tied to NFL events.
The brief also cited more than $25 billion in prediction market volume during 2025 and over $173 billion in overall Kalshi volume by late August 2026.
Gaming attorney Daniel Wallach said the filing could strengthen the case for Supreme Court review, highlighting the significance of the NFL challenging the current federal framework despite previously advocating federal regulation.
League Calls for Stronger Integrity Safeguards
The NFL wants prediction market operators to adopt protections comparable to those applied by state-regulated sportsbooks.
These include restrictions on certain contracts, higher minimum ages, and closer cooperation with leagues on insider information.
In March, the NFL urged Kalshi and Polymarket to stop offering contracts it considered particularly vulnerable to manipulation, including markets involving individual plays and player injuries.
CFTC Chairman Michael Selig has said the agency would defer to sports leagues on integrity concerns.
The NFL’s position contrasts with commercial agreements signed by other major U.S. sports leagues.
MLB named Polymarket its exclusive prediction market partner earlier this year and separately partnered with the CFTC on betting integrity.
The NHL has licensing agreements with both Polymarket and Kalshi, while MLS signed an exclusive licensing agreement with Polymarket in January.
Those arrangements highlight differing approaches among leagues to prediction markets and their role in sports.
Kalshi Defends Federal Regulation
Kalshi rejected the NFL’s argument, saying it prioritizes market integrity and that the CFTC already oversees sports-related markets.
The company pointed to partnerships with other leagues and argued that federal oversight offers a more consistent framework than state-by-state regulation.
Intellectual property lawyer Ariel Givner similarly argued that the NFL and states were conflating the underlying sporting event with the legal nature of the contract.
The competing positions leave the central question unresolved: whether sports prediction contracts belong exclusively within federal derivatives oversight or remain subject to state gambling laws.
The CFTC already invoked emergency powers earlier this year and ordered Kalshi to continue operating in New York as the state challenges its sports prediction contracts under gambling laws.
