The National Football League has formally told the U.S. Supreme Court that sports contracts offered on prediction markets amount to gambling and should be regulated by states.
According to the Supreme Court docket, the NFL filed an amicus brief on Oct. 8 backing an appeal brought by the New Jersey Division of Gaming Enforcement in its case against prediction market platform Kalshi, and asked the court to hear the matter.
Case 26-299 challenges a Third Circuit ruling
The case is docketed as No. 26-299. New Jersey filed a petition for certiorari on Sept. 2 challenging an April ruling by the U.S. Court of Appeals for the Third Circuit.
That court held that Kalshi’s sports-related event contracts were swaps falling within the exclusive jurisdiction of the Commodity Futures Trading Commission, which meant state gambling laws were preempted.
NFL says more than half of opening Sunday volume was tied to its games
In its filing, the league said that on the first Sunday of the current season, prediction markets handled $3.3 billion in total trading volume, with $1.8 billion tied to NFL games. That represented more than half of the total.
The brief was signed by lawyers including William Barr, who served as U.S. attorney general during President Donald Trump’s first term. The filing came from the NFL alone, without other professional leagues joining it.
League says state gaming rules already contain integrity protections
The NFL argued that state governments and licensed sportsbooks have already built systems meant to protect the integrity of games, including bans on certain bet types and age restrictions, while prediction markets are not subject to those same rules.
As an example, the brief said that in nearly every state, an 18-year-old cannot place a wager on a game through Caesars Sportsbook but can take a position on the same game through Kalshi.
The league also said the CFTC has 543 employees nationwide, while gaming regulators in Nevada and Pennsylvania each have nearly 400 staff.
The NFL wrote in its filing that Kalshi has not worked with the league on compliance issues. It also told CNBC that neither the CFTC nor prediction market operators prohibit easily manipulated bet types or set a minimum age threshold of 21. Given the CFTC’s staffing limits, the league said, that work is better handled by the states.
Federal appeals courts have split on how to classify the contracts
The NFL asked the Supreme Court to take the case now and resolve the question before the next NFL season begins.
The brief said the Sixth Circuit in September and the Ninth Circuit in August both found that Kalshi’s sports event contracts do not meet the statutory definition of swaps. That view conflicts with the Third Circuit’s position.
The docket shows that the appeal has already drawn multiple amicus briefs, including filings from NCLGS, a national organization representing state gaming legislators, the International Association of Gaming Regulators, the North American Gaming Regulators Association, and a joint brief submitted on Oct. 7 by Ohio and 39 other states together with the District of Columbia.
Kalshi’s response deadline has been extended to Nov. 9. The Supreme Court has not yet decided whether it will hear the appeal.
Leagues have taken different approaches to prediction market partnerships
CNBC reported that the NHL has partnered with Kalshi and Polymarket, while MLB, Major League Soccer and UFC have agreements with Polymarket. The NFL, NBA and PGA do not currently have deals with prediction market operators.