NFL Tells Supreme Court Sports Prediction Markets Are Gambling

NFL challenges prediction market status at Supreme Court

The National Football League (NFL) has filed a legal brief with the U.S. Supreme Court, arguing that sports prediction contracts are gambling. The league is supporting New Jersey regulators who want these markets to be controlled by state laws instead of federal financial regulations.

The NFL is targeting the arguments used by Kalshi, a prediction market. A prediction market is a platform where people trade on the outcome of future events. Kalshi claims its contracts are financial "swaps," which are tools traditionally used to manage risk. However, the NFL argues these contracts are simply bets on events where users have no underlying financial interest.

Details of the NFL's legal argument

• The NFL states that sports contracts expose users to new risks rather than protecting them from existing financial ones.
• Trading volume for NFL events on prediction markets reached nearly $2 billion on the first Sunday of the season.
• The league argues that platforms should adopt safeguards used by state-regulated sportsbooks, such as stricter age limits and better protection against insider trading.

NFL breaks ranks with other sports leagues

The NFL’s position puts it at odds with other major U.S. sports organizations. Earlier this year, Major League Baseball (MLB) named Polymarket as its exclusive prediction market partner. The National Hockey League (NHL) and Major League Soccer (MLS) have also signed licensing or partnership deals with prediction market companies like Kalshi and Polymarket.

In contrast, the NFL has previously asked regulators to stop markets that focus on individual plays or player injuries. The league believes these specific types of contracts are highly vulnerable to manipulation.

What is confirmed

The NFL officially filed an amicus brief in the Supreme Court case Flaherty v. KalshiEX, LLC. An amicus brief is a legal document submitted by a party not directly involved in a lawsuit but who has a strong interest in the outcome. The filing confirms that the NFL wants the court to resolve regulatory uncertainty caused by different rulings in lower courts.

Uncertainty surrounding the Supreme Court decision

It is not yet certain if the Supreme Court will choose to hear the case. The NFL is urging the court to take the case to resolve a "split" among lower courts, where different judges have reached different conclusions about how to regulate these markets.

Why this matters for the crypto industry

The outcome of this case could determine if prediction markets can operate across the entire country under federal rules or if they must follow different laws in every state. The Commodity Futures Trading Commission (CFTC), which regulates certain financial markets, has seen its authority challenged in this area. If the court sides with the NFL, it could make it harder for these platforms to offer sports-related products nationwide.

Sources

• The Block

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