Key Highlights
- The NFL filed an amicus brief urging the Supreme Court to review the dispute over Kalshi’s sports-related event contracts.
- The league said prediction markets lack some safeguards used by state-regulated sportsbooks, including restrictions on certain wagers and information sharing.
- The NFL argued sports event contracts are not “swaps” under the Commodity Exchange Act because they create exposure to game outcomes rather than hedge existing financial risk.
The National Football League (NFL) has asked the U.S. Supreme Court to review a legal dispute over sports-related prediction market contracts offered by Kalshi.
In an October 8 amicus brief in Flaherty v. KalshiEX, LLC, the NFL argued that sports event contracts traded on federally regulated prediction markets should not be treated as “swaps” under the Commodity Exchange Act (CEA). The league said the case could determine whether states can apply gambling laws to sports contracts offered through federally regulated prediction markets.
NFL raises game-integrity concerns
The NFL said state-regulated sportsbooks operate under safeguards covering prohibited wagers, suspicious activity, and information sharing. The league argued that comparable protections are not consistently applied to sports contracts offered through prediction markets.
The NFL identified four types of contracts it believes should face restrictions:
- Markets that can be easily manipulated by one person.
- Contracts involving player injuries, fan safety or misconduct.
- Contracts tied to officiating decisions.
- Markets involving events whose outcomes are already known or can be known in advance.
The league said these markets could create risks for players, coaches, officials, and other participants.
NFL previously asked CFTC to tighten rules
The Supreme Court filing follows the NFL’s earlier request for tighter restrictions on sports prediction markets.
In a July 27 letter to the Commodity Futures Trading Commission (CFTC), the league said the agency’s proposed rules did not go far enough to address risks involving sporting events. The NFL called for a minimum trading age of 21, centralized self-exclusion, a ban on margin trading in sports markets and tighter advertising restrictions.
For player-performance contracts such as props and parlays, the league proposed a pre-approval process before the contracts could begin trading. The NFL also opposed tokenized sports event contracts, including secondary-market trading.
Crypto industry takes a different position
The NFL’s position contrasts with comments from parts of the crypto industry.
The Hyperliquid Policy Center and Multicoin Capital have urged the CFTC to finalize and streamline a federal framework for prediction markets.
The positions reflect a broader dispute over whether sports prediction markets should operate under federal derivatives rules or state gambling laws.
Prediction-market activity has expanded
CFTC data cited by the NFL show that the daily average number of event contracts on one prediction market increased from about 1,600 in April 2025 to 162,000 in April 2026. The NFL also cited prediction-market trading volumes exceeding $25 billion in 2025 and said Kalshi had surpassed $173 billion in overall trading volume by late August 2026.
On the first Sunday of the 2026 NFL season, the league said about $1.8 billion of $3.3 billion in prediction-market volume was tied to NFL-related contracts.
NFL says sports contracts are not swaps
A central issue is whether sports event contracts qualify as swaps under the CEA.
The NFL argued that swaps are generally used to manage or hedge preexisting financial or commercial risks, such as changes in interest rates, currencies, or commodity prices.
Sports prediction contracts, by contrast, create exposure to the outcome of a game or player performance rather than hedging an existing financial exposure, the league argued. The NFL therefore said sports event contracts should not fall within the CEA’s definition of swaps.
Appeals courts have reached different conclusions
Federal appeals courts have taken different positions on whether Kalshi’s sports contracts qualify as swaps.
The Third Circuit held that Kalshi’s sports-related event contracts fall within the CFTC’s exclusive jurisdiction because they qualify as swaps. The Supreme Court petition in Flaherty asks the justices to review that ruling.
The Ninth Circuit, in KalshiEX LLC v. Assad, reached the opposite conclusion, holding that the sports contracts at issue did not qualify as swaps.
The Sixth Circuit also ruled in September that Kalshi’s sports-event contracts do not constitute swaps under the CEA. The court separately held that, even assuming the contracts were swaps, the CEA did not preempt Ohio or Tennessee gambling laws.
The dispute has drawn broader state involvement. Ohio and 38 other states joined New Jersey in asking the Supreme Court to review the case and preserve state authority over prediction markets. Washington, D.C., also joined the effort.
The conflicting rulings have created uncertainty over the respective roles of the CFTC and state gambling regulators.
NFL warns against federalizing sports betting
The NFL argued that treating these contracts as federally regulated swaps could allow sports betting to be offered through federally regulated designated contract markets, potentially limiting the role of state gambling regulators.
The league said gambling has historically been regulated by the states and argued that Congress did not clearly state in Dodd-Frank that it intended to transfer sports-betting regulation to the federal government.
The brief also invokes the major questions doctrine, arguing that a broad interpretation of the CEA could give the CFTC substantial authority over sports betting without a clear congressional mandate.
The NFL also raised differences in minimum-age requirements. The league noted that traditional sportsbooks generally require customers to be at least 21, while prediction markets have allowed some users as young as 18 to trade sports contracts.
Supreme Court has yet to decide on review
The NFL is asking the Supreme Court to review whether sports-related event contracts qualify as swaps under the CEA and whether federal law prevents states from applying their sports-betting regulations to those contracts.
The Supreme Court docket shows that New Jersey’s petition in Flaherty v. KalshiEX, LLC, No. 26-299, was filed on September 2, with Kalshi’s response deadline extended to November 9.
The Supreme Court has not yet decided whether to hear the case.
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