NFL files amicus brief with Supreme Court over regulation of prediction markets

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The Backstory

A fight over who gets to police sports wagers

The NFL’s move to file an amicus brief with the Supreme Court marks a significant escalation in the legal and regulatory fight over prediction markets. The league is not arguing that event contracts should disappear. Its position is narrower but consequential: sports event contracts should be treated as gambling, not financial swaps, and therefore regulated primarily by states rather than solely by the Commodity Futures Trading Commission.

That argument places the NFL alongside state officials, gaming regulators and gambling-policy groups that say platforms such as Kalshi have created a parallel sports betting system outside the consumer-protection rules built after the fall of the federal sports betting ban. For the league, the issue is also about integrity. Prediction markets can offer contracts on game outcomes and related events, creating exposure to contests the NFL is responsible for protecting. The league’s concerns over minimum age limits, manipulation-prone markets and suspicious activity monitoring echo warnings state regulators have raised for months.

The Supreme Court has not yet agreed to take up the central dispute. But the volume of briefs now arriving at the court underscores how quickly a once-technical commodities-law question has become a national gambling-policy fight.

Kalshi’s courtroom win triggered a wider backlash

The current dispute traces back to Kalshi’s effort to protect its sports event contracts from state enforcement. New Jersey regulators moved against the platform, arguing that its offerings amounted to sports wagering under state law. Kalshi countered that it operates under federal commodities law and that its contracts are subject to CFTC oversight, not a patchwork of state gambling regimes.

A federal court in New Jersey sided with Kalshi in April, finding that the platform was likely protected from state enforcement because its contracts fell within the federal framework. That ruling gave prediction markets a powerful foothold and alarmed state officials who saw the decision as a threat to their authority over gambling. It also prompted a coordinated response from state attorneys general, including an earlier coalition led by Ohio Attorney General Dave Yost that opposed Kalshi in federal court.

That coalition framed the issue as consumer protection. States have spent years setting rules for online sports betting, including age thresholds, licensing, responsible gambling tools, tax structures and enforcement standards. Their concern is that if sports-event contracts can be offered through federally regulated exchanges, companies may avoid state gambling rules by changing the legal label attached to wagers.

Kalshi and its supporters have argued the opposite: that federally regulated prediction markets provide standardized oversight and cannot function if forced to comply with 50 different state regimes. That tension has become the core question now moving toward the Supreme Court.

Conflicting appeals rulings raised the stakes

The legal picture became more urgent after federal appellate courts reached different conclusions. The Third Circuit ruled that federal law likely preempts New Jersey from applying its sports betting rules to Kalshi’s contracts. But the Ninth Circuit later reached the opposite result in a Nevada-related case, rejecting Kalshi’s attempt to block state enforcement.

That split gave regulators a stronger argument for Supreme Court intervention. The North American Gaming Regulators Association and the International Association of Gaming Regulators filed a joint brief seeking review, saying the divided rulings had created uncertainty over the boundary between the CFTC and state gambling authorities. Their filing, described in a Supreme Court review request by NAGRA and IAGR, emphasized safeguards that are standard in gambling regulation but may not apply in the same way to prediction-market exchanges.

Those safeguards include minimum age requirements, self-exclusion systems, rules preventing athletes and other prohibited participants from wagering, and monitoring for suspicious betting activity. The regulators also warned that the outcome could affect tribal gaming, a field governed by complex federal, state and tribal compacts. If event contracts are placed beyond state gambling law, existing enforcement structures could be weakened.

The disagreement between circuits also gives the Supreme Court a practical reason to intervene. Without a national ruling, prediction markets may face one legal standard in some states and a different one in others, while regulators and operators fight through piecemeal litigation.

States, lawmakers and advocates converged on the court

The NFL’s brief follows a wave of filings by groups that do not always share the same agenda but are aligned on one point: the Supreme Court should clarify whether sports-event contracts can bypass state gambling law. A bipartisan group of 39 attorneys general filed in support of New Jersey’s petition, arguing that prediction markets infringe on state sovereignty and leave consumers without protections. Their effort was part of the broader set of Supreme Court requests tied to sports betting regulation.

State lawmakers also entered the fight. The National Council of Legislators from Gaming States urged the justices to hear the Kalshi case, warning that a ruling against state authority could invite other gambling operators to recast their products as federally regulated financial instruments. The group’s filing, covered in lawmakers’ call for Supreme Court review of the Kalshi dispute, reflected a broader fear among state officials that the prediction-market model could undercut the regulatory settlements reached after the 2018 repeal of the federal sports betting ban.

Responsible gambling groups went further. In a separate brief, they asked the court to revisit part of the Professional and Amateur Sports Protection Act, known as PASPA. Their argument, if accepted, could have implications not only for prediction markets but also for state-authorized sports betting. That position remains a long shot, but it shows how the Kalshi litigation has reopened debates many in the gambling industry thought were settled after the Supreme Court struck down PASPA’s core restrictions.

The CFTC is defending its turf

The CFTC has taken the opposite view from the states and the NFL. Chairman Michael Selig has argued that the agency, not individual state regulators, has authority to determine whether federally listed event contracts are lawful. In an op-ed and subsequent public comments, he said the CFTC would defend prediction markets against state challenges and would not allow states to undermine the agency’s jurisdiction.

The agency’s stance was formalized when it filed an amicus brief supporting federal regulation of prediction markets. The CFTC position is that these contracts are swaps serving legitimate economic functions, not illegal gambling products. That framing is essential for prediction-market operators, because CFTC jurisdiction provides a single federal pathway for listing contracts across the country.

For states, however, that same federal pathway looks like a loophole. Sports betting has traditionally been treated as a police-power issue involving public welfare, consumer protection and criminal enforcement. States argue that Congress did not silently strip them of that authority when it created the commodities framework. The NFL’s brief strengthens that argument by adding the perspective of a league whose games form the basis of many contracts.

The result is a rare confrontation between federal market regulation and state gambling law. The CFTC says uniform federal rules are necessary for prediction markets to operate. States say gambling products cannot avoid local rules simply because they are traded on an exchange.

Why the outcome matters beyond Kalshi

The Supreme Court fight is about Kalshi, but its consequences could reach much further. If the court holds that sports-event contracts fall exclusively under CFTC jurisdiction, prediction markets could become a national competitor to licensed sportsbooks. They might offer sports-related exposure in states where sports betting is restricted or subject to tighter controls, while avoiding state licensing fees, tax rates and responsible gambling mandates.

If the court sides with states, prediction markets may have to limit sports contracts or comply with state-by-state gambling rules. That would preserve the existing sports betting framework but could constrain an emerging market that has attracted users, investors and political attention.

The NFL’s intervention adds institutional weight because professional leagues were central players in earlier sports betting debates. After opposing expanded betting for years, leagues have since built commercial relationships with sportsbooks while pushing for integrity controls. Prediction markets now present a different challenge: large volumes of sports-linked trading outside the regulatory channels leagues and states have learned to monitor.

That is why the present case has become a test of legal classification. Calling a product a swap places it in one regulatory world. Calling it a bet places it in another. The Supreme Court’s eventual answer could determine whether prediction markets remain a federally supervised financial product or become subject to the same state-by-state rules that govern the rest of the sports betting industry.