The National Football League has asked the U.S. Supreme Court to hear New Jersey’s challenge to Kalshi, arguing that sports-event contracts should fall under state gambling laws rather than receive nationwide protection as federally regulated derivatives.
In an amicus brief in Flaherty v. KalshiEX, LLC, No. 26-299, the NFL urged the justices to resolve a growing judicial dispute over prediction markets that let users trade contracts tied to the outcome of sporting events. The league’s argument places the case at the center of a regulatory contest between the Commodity Futures Trading Commission, which oversees derivatives markets, and state gambling authorities that license and police sportsbooks.
The NFL said Kalshi’s sports contracts do not qualify as “swaps” under federal commodities law. It argued that the CFTC therefore does not hold exclusive authority over the products, leaving states free to apply their own gambling statutes.
The outcome could determine whether platforms such as Kalshi can offer sports-event markets across the United States under a federal regulatory framework or must comply with a patchwork of state betting restrictions.
nfl argues sports contracts do not hedge financial risk
The league’s filing relies on reasoning from the Sixth and Ninth U.S. Circuit Courts of Appeals, which have described swaps as instruments generally used to manage or hedge an existing financial exposure. A company might use a swap, for example, to reduce the effect of changing interest rates or commodity prices on its business.
Sports prediction contracts work differently, the NFL argued. A user buying a contract tied to an NFL game, a player’s performance, or a single play is taking a position on an event without holding any underlying financial risk connected to that event.
That distinction is central to New Jersey’s legal position. If a sports contract is treated as a regulated derivative, the CFTC’s authority could preempt state restrictions. If it is treated as gambling under state law, prediction-market operators could face licensing requirements, product bans, and enforcement actions in states that prohibit or tightly regulate sports wagering.
The NFL said allowing federally supervised event-contract platforms to offer sports products without the controls imposed on sportsbooks creates an uneven regulatory structure. Its brief called for protections comparable to those used in state-regulated betting markets, including restrictions on certain types of contracts, higher minimum-age requirements, and more extensive information-sharing arrangements with leagues.
nfl volume gives the case a larger commercial scale
The league used the scale of trading around professional football to support its argument that the question has moved beyond a narrow dispute over financial-market definitions.
According to the NFL’s brief, nearly $2 billion of the $3.3 billion traded across prediction markets on the first Sunday of the NFL season was connected to NFL events. The brief also said prediction-market trading volume exceeded $25 billion during 2025 and that Kalshi had cleared more than $173 billion in total volume by late August 2026.
Those figures illustrate how sports have become a major source of activity for platforms originally associated with contracts on economic releases, elections, weather, and other public events. Sports markets offer a frequent calendar of highly visible outcomes, from game winners to player-level events, and their growth has drawn increasing attention from leagues, regulators, and state gaming officials.
The NFL’s position is particularly focused on contracts it considers susceptible to manipulation or misuse of nonpublic information. In March, the league asked Kalshi and Polymarket to stop offering certain sports-related markets, including contracts connected to individual plays and player injuries.
Sports leagues have long monitored injury information, lineup changes, officiating issues, and other data that can influence betting activity. The NFL’s filing argues that a federally regulated contract structure should not weaken the ability of leagues and state authorities to address those risks.
cftc oversight remains a point of conflict
Kalshi has publicly rejected the NFL’s characterization of its markets, saying the CFTC already regulates sports-related event contracts and has the tools to police market integrity. The company has also pointed to partnerships between prediction-market operators and other professional leagues as evidence that federal oversight can coexist with sports-integrity protections.
CFTC Chairman Michael Selig has said the agency would defer to sports leagues on integrity concerns, according to the NFL’s filing. The league’s brief suggests that deference alone would not replace rules that states apply directly to conventional sportsbooks.
The disagreement also exposes contrasting commercial approaches among major U.S. leagues. Major League Baseball has named Polymarket its exclusive prediction-market partner and has separately partnered with the CFTC on betting integrity. The National Hockey League has licensing agreements with both Polymarket and Kalshi. Major League Soccer signed an exclusive licensing agreement with Polymarket in January.
Those arrangements do not settle the legal issue before the Supreme Court. They show that leagues can see commercial value in prediction-market partnerships while taking different positions on how sports contracts should be regulated and which safeguards should apply.
court review could resolve conflicting rulings
The NFL asked the Supreme Court to take the case because lower courts have reached divergent conclusions on the boundary between swaps and gambling products. The league said the split has produced uncertainty for states, sports organizations, platforms, and users.
Gaming attorney Daniel Wallach has commented publicly on the dispute, while intellectual-property lawyer Ariel Givner has described the legal tension as arising from the difference between the sporting event itself and the financial structure of a contract tied to that event. That divide is likely to remain at the heart of the case: federal law regulates certain contracts based on their design, while states traditionally regulate wagering based on the activity being offered to consumers.
A Supreme Court decision in favor of New Jersey could give states greater room to restrict or regulate sports prediction contracts, potentially forcing platforms to redesign products state by state. A ruling favoring Kalshi would strengthen the argument that CFTC-regulated event contracts can be offered nationally even where comparable sportsbook products face state-level limits.
For the NFL, the case is less about whether people can take positions on sports results than about who sets the rules for a fast-growing form of sports wagering—and whether those rules adequately address integrity, age access, and market manipulation.
Curious how event contracts work in crypto? Explore Toobit’s event contracts guide to compare structures, risks, and regulation.
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