NFL urges Supreme Court to decide whether states or CFTC regulate prediction markets

The NFL's brief

The National Football League filed an amicus brief with the US Supreme Court on Thursday, 8 October, supporting New Jersey regulators' request for review of whether federal regulators or the states should oversee sports-related prediction-market contracts. The league asks the court to resolve a split among lower courts over whether the Commodity Futures Trading Commission (CFTC) or state regulators hold authority. The NFL said the CFTC may lack the resources to police sports betting adequately, and that the issue would be less significant if the agency adopted protections comparable to those used by state gambling regulators. The brief also urges restrictions on bets susceptible to manipulation, protections against betting by insiders and a minimum age of 21. It names specific wagers it wants barred, including whether a kicker will miss a field goal, player injuries, officiating decisions and outcomes knowable in advance, such as whether the first play will be a run or pass. The league framed the filing as an opportunity for the court to act.

The league is joining with many voices to encourage the Court to take this opportunity, now, to resolve the disagreement in the lower courts about who should regulate prediction markets -- the CFTC or the states.

A split among appeals courts

The case follows a 25 September ruling by the 6th US Circuit Court of Appeals against Kalshi, the prediction-market operator, which held that Ohio and Tennessee can regulate its event contracts under their gambling laws. That decision deepened a split among federal appeals courts and raised the prospect of Supreme Court review. New Jersey regulators tried to shut down Kalshi's sports wagering operations last year, but a federal appeals court sided with the company, while other appeals courts have reached the opposite conclusion. New Jersey asked the Supreme Court last month to decide whether state or federal officials have the power to regulate prediction markets. Twenty states have argued in the courts that prediction markets should be subject to state rules. Kalshi expects the 6th Circuit decision would not withstand further review, and its spokesperson Dani Lever told Reuters last month that the company saw the ruling as proof of the problem.

The ruling shows exactly why a state-by-state patchwork doesn't work,

Regulators and companies respond

POLITICO reports that President Donald Trump believes the job of regulating prediction markets should fall to the federal government alone. The CFTC currently has only one member, chair Mike Selig, who has argued that prediction markets fall under the commission's regulatory purview. Brooke Nethercott, the CFTC's public affairs director, said the commission had engaged with the NFL "since day one." Her statement criticized the league's decision not to sign a memorandum of understanding with the agency.

It's unfortunate the NFL declined to sign an MOU (memorandum of understanding) with the CFTC, which would've provided the league the ability to better discuss, cooperate and exchange information with us to promote the integrity and resilience of prediction markets.

The Coalition for Prediction Markets said its members are "committed to fair, transparent, and well-regulated markets" and that the CFTC "is actively policing these markets and advancing rulemaking to address concerns raised by sports leagues." Kalshi spokesperson Elisabeth Diana said the company is committed to protecting game integrity and pointed to its partnerships with the MLB and NHL. A Polymarket spokesperson said the company shares the NFL's commitment to game integrity and is working with federal regulators and other sports leagues toward consistent nationwide standards, rather than "a fragmented patchwork of state laws."

Age limits and money at stake

The legal age for sportsbooks in most states is 21, while prediction markets allow participants aged 18 across the country. The CFTC has rejected the league's call for a minimum trading age of 21. Based on the NFL's filing, NFL-related contracts accounted for $1.8 billion of the $3.3 billion traded on prediction markets on the first Sunday of this NFL season. Ticker Tracker data cited by The New York Times showed trading on the NFL made up 65.8 percent of Kalshi's sports volume the previous Sunday. The NFL's brief also argues that the sports-related contracts are in substance sports gambling rather than the financial swaps Kalshi contends they are.

Pending review

The justices have not yet decided whether to take up the case. The NFL's filing is one of the briefs urging the court to resolve the split between federal appeals courts. The league's position puts it at odds with the Trump administration's stance on federal oversight. The NFL has said it has urged the CFTC and prediction-market companies for some time to adopt the safeguards it describes.