The NFL has taken its fight with prediction markets to the U.S. Supreme Court.
In a brief filed Thursday, the league backed New Jersey’s attempt to bring sports prediction markets such as Kalshi under state gambling laws. The NFL’s position is straightforward: contracts on whether a team wins a game, a player reaches a statistical target, or another sports outcome occurs function like sports bets and should be regulated that way.
Kalshi disagrees. The company argues that its event contracts are federally regulated financial products under the Commodity Exchange Act and fall under the jurisdiction of the Commodity Futures Trading Commission.
That disagreement has been working its way through courts and state regulators for more than a year. Now the NFL wants the Supreme Court to settle it.
The Court has not agreed to hear the case yet. New Jersey filed its petition in September, and Kalshi currently has until November 9 to respond. Still, the NFL entering the case significantly raises the stakes because no sports league has more exposure to the growth of prediction market betting.
The NFL Says Sports Contracts Are Bets
The legal argument surrounding prediction markets can become complicated quickly, but the basic disagreement is not.
Kalshi allows users to buy contracts based on whether an event will happen. In sports, that can mean something as simple as whether the Cowboys will beat the Buccaneers.
A traditional sportsbook might offer Dallas at a certain moneyline.
A prediction market could offer a contract priced according to the market’s estimated probability that Dallas wins.
The mechanics are different, but the NFL argues the underlying activity is still sports wagering.
That distinction matters because state licensed sportsbooks have to operate under individual state gambling laws. They need licenses, follow state betting restrictions, cooperate with gaming regulators, and comply with rules covering everything from advertising to prohibited wagers.
Prediction markets operate under federal CFTC oversight instead.
Kalshi’s position is that federal law preempts those state gambling rules when the contracts are traded on a federally regulated exchange.
The NFL is now telling the Supreme Court that this structure allows prediction markets to offer what amounts to sports betting without following the system states spent years building after the Supreme Court overturned the federal sports betting ban in 2018.
NFL Prediction Markets Are Already Huge
The NFL’s involvement would matter even if prediction markets were still a small industry experiment.
They are not.
According to the league’s Supreme Court filing, NFL event contracts accounted for approximately $1.8 billion of $3.3 billion in total prediction market trading volume on the first Sunday of the 2026 NFL season.
That means more than half of all prediction market volume that day was tied to NFL events.
The number helps explain why the league is pushing the issue now rather than waiting for individual states and operators to continue fighting it out in lower courts.
Sports have become one of the biggest growth areas for prediction markets. Kalshi and other platforms increasingly offer contracts that look familiar to anyone who has used a sportsbook, even though they are structured and regulated differently.
The NFL does not appear to be arguing that prediction markets should disappear.
It is arguing that when those markets are based on NFL games and players, they should operate with many of the same safeguards as sportsbooks.
The NFL Is Worried About More Than Game Winners
The league’s concern goes beyond simple contracts on which team wins.
Prediction markets can potentially offer contracts tied to individual events inside a game.
That is where the NFL sees a bigger integrity problem.
The league has previously raised concerns about markets connected to player injuries, missed kicks, fumbles, officiating decisions, and other events that could potentially be influenced or known by a relatively small number of people.
The issue is not difficult to understand.
A contract asking whether the Chiefs win a game depends on the performance of an entire team over four quarters.
A contract asking whether a particular player will be available, whether a kicker misses an attempt, or whether some very specific event occurs can depend on information known by far fewer people.
Sportsbooks already operate under restrictions designed to reduce some of those risks. States can prohibit certain wagers, investigate unusual betting activity, and require operators to share information with leagues and regulators.
The NFL argues prediction markets should face similar rules.
The league says the current CFTC framework was built primarily around financial markets, not the specific integrity problems created when people can trade on individual sporting events.
The NFL Also Wants a 21+ Age Limit
Age is another major difference.
Legal sports betting generally requires customers to be at least 21 in the states where it is available.
Prediction markets can be available beginning at age 18.
The NFL wants sports prediction markets brought in line with the 21+ standard used by regulated sportsbooks.
That puts the league in an interesting position.
For years, professional sports leagues worked closely with state regulators and sportsbook operators as legal betting expanded. The NFL has official sportsbook relationships and has integrated betting into broadcasts and other parts of the sport.
The league is not arguing against sports betting itself.
It is arguing that two products offering wagers on essentially the same NFL events should not operate under completely different sets of rules.
That may become one of the strongest arguments states make as the prediction market fight continues.
New Jersey Is at the Center of the Case
The Supreme Court dispute started after New Jersey attempted to stop Kalshi from offering sports contracts without a state gaming license.
Kalshi sued and argued that the Commodity Exchange Act gives the CFTC exclusive authority over contracts traded on its federally regulated platform.
The Third Circuit sided with Kalshi at the preliminary stage, finding that the company was likely to succeed on its federal preemption argument.
Other federal courts have reached different conclusions in similar prediction market disputes.
New Jersey now wants the Supreme Court to resolve that disagreement and determine whether states can enforce their gambling laws against federally regulated prediction markets.
The case is Flaherty v. KalshiEX, LLC, and New Jersey filed its petition for Supreme Court review on September 2. Kalshi’s response deadline has been extended to November 9. Supreme Court
The Supreme Court could agree to hear the case, reject the petition, or wait for additional lower court decisions.
For now, there is no guarantee the justices take it.
The NFL clearly wants them to.
Prediction Markets Have Outgrown the Regulatory Gray Area
This debate was easier to ignore when sports contracts represented a small part of prediction market trading.
That is no longer the case.
Kalshi has expanded rapidly into sports, while prediction markets more broadly have started competing for the same customers who already use DraftKings, FanDuel, BetMGM, Caesars, and offshore sportsbooks.
The user experience has also become increasingly familiar.
Someone looking at the probability that an NFL team wins on a prediction market does not need to understand derivatives law to recognize what the contract represents.
That is the problem for states.
They regulate sportsbooks offering wagers on the same games while prediction market companies argue that their federal status allows them to operate nationwide without obtaining those state licenses.
The NFL’s filing brings that contradiction directly to the Supreme Court.
The NFL Is Taking a Different Path From Other Leagues
The NFL’s position is also notable because other major sports leagues have been more willing to work directly with prediction market companies.
Major League Baseball has partnered with Polymarket, while the NHL has worked with both Kalshi and Polymarket. Other leagues and teams have also started experimenting with prediction market sponsorships and licensing deals.
The NFL has been much more cautious.
It has tried to push prediction market operators toward safeguards similar to those already used in regulated sports betting, particularly around market integrity and the types of contracts that can be offered.
The league says those efforts have not gone far enough.
That does not mean the NFL will never work with a prediction market company.
It does mean the league wants the regulatory structure settled first.
For the NFL, the issue is less about whether fans should be able to trade on football outcomes and more about who sets the rules once they do.
Kalshi Says Federal Regulation Is Enough
Kalshi continues to reject the argument that state sportsbook laws should apply to its markets.
The company maintains that it operates a federally regulated exchange and that the CFTC already has authority over its contracts.
Kalshi has also argued that a federal system provides consistency.
Traditional sports betting operates under a patchwork of state laws. A wager available in New Jersey may be prohibited in another state. Tax rates, player prop rules, licensing requirements, and minimum ages can all vary.
Prediction markets avoid much of that state by state structure by operating under one federal framework.
That is one of the reasons they have expanded so quickly.
It is also exactly what states are challenging.
Kalshi says federal regulation gives it the right to operate nationally.
States say that structure cannot be used to bypass gambling laws simply by calling a sports bet a financial contract.
The NFL has now clearly chosen the state side of that argument. The Block
This Could Reshape Sports Betting in the US
The stakes extend well beyond Kalshi and New Jersey.
If the Supreme Court eventually rules that sports event contracts are protected from state gambling regulation, prediction markets could have a major advantage over traditional sportsbooks.
A prediction market could potentially offer sports contracts nationwide under federal regulation while DraftKings or FanDuel still needs separate licenses in every state where sports betting is legal.
That would create two very different regulatory systems competing for essentially the same customer.
A ruling in favor of the states could move the market in the opposite direction.
Prediction platforms offering sports contracts could be forced to comply with state gaming laws, obtain licenses, restrict access in states where they are not approved, and potentially remove certain types of markets.
The result would affect Kalshi, Polymarket, sportsbooks, sports leagues, state regulators, tribes, and eventually bettors themselves.
That is why this case has become much bigger than one cease and desist order in New Jersey.
The NFL Just Raised the Stakes
Prediction markets have spent the last two years moving closer to traditional sports betting.
The NFL is now asking the Supreme Court to decide whether the law should recognize that shift.
The league is not calling for sports prediction markets to be banned. It is arguing that if companies are going to let people put money on NFL games, they should follow many of the same rules as sportsbooks already taking those wagers.
With $1.8 billion in NFL related prediction market volume recorded on the first Sunday of the season, this is no longer a theoretical regulatory dispute.
Prediction markets have become a real competitor in the US sports betting business.
The question is whether they are also sports betting businesses under the law.
If the Supreme Court takes the case, that question could finally get an answer.
Last Updated: 1 hour ago
