Are Prediction Markets Gambling? The NFL Told the Supreme Court Yes. What It Really Wants Is a Referee.

On October 8 the NFL filed a friend-of-the-court brief in the Kalshi Supreme Court case, Flaherty v. KalshiEX, No. 26-299, urging the justices to take it. The case is New Jersey's petition asking the Court to decide whether the 2010 Dodd-Frank Act stripped states of power to regulate sports bets placed on exchanges registered with the Commodity Futures Trading Commission. The Third Circuit said yes and ruled for Kalshi. The Sixth and Ninth Circuits have since said no.

The NFL sided with New Jersey. It told the Court that prediction markets are a new form of sports betting, that NFL games drove more than half of all prediction-market volume on the first Sunday of this season, $1.8 billion of $3.3 billion, and that the exchanges and the CFTC have refused the safeguards state regulators impose.

The league is not alone. Ohio, 38 other states and the District of Columbia filed a brief the day before, alongside gaming regulators, gaming-state legislators, a tribe and anti-gambling groups. Kalshi's response is due November 9.

And the league has history here. Its own brief notes that the NFL was a plaintiff in Murphy v. NCAA, the 2018 case it lost, which opened the door to legal sports betting state by state.

The legal question is a single word in the Commodity Exchange Act: swap. Dodd-Frank gave the CFTC exclusive jurisdiction over swaps traded on its registered exchanges. If a sports event contract is a swap, Kalshi argues, federal law displaces state gambling law and New Jersey cannot touch it.

The NFL argues that reading is wrong. In its view, a swap is a tool for hedging risk a business already faces, like a fuel price or an interest rate. A contract on whether a team wins creates risk that did not exist before, which makes it a bet. The league adds two arguments for avoiding the broad reading: that Congress would need a clear statement to federalize a multibillion-dollar industry states have always regulated, and that the Commerce Clause may not allow Congress to push purely in-state gambling onto federal exchanges at all.

Read the brief past its headline, and the NFL's position is narrower and more revealing than "prediction markets are gambling."

The league says plainly that it can live with either answer. If the Court sides with the Sixth and Ninth Circuits, state regulators and their protections apply. If it sides with the Third Circuit and makes the CFTC the exclusive regulator, the NFL says it will redouble its efforts with the CFTC, the exchanges and Congress before the 2027 season. It goes further: if the CFTC and the exchanges adopted the same safeguards states require, the NFL says, the whole jurisdiction fight would be largely an arcane issue.

What the league actually wants is enforcement. It lists four categories of bets it wants banned: outcomes one person can manipulate, like a kicker missing a field goal; objectionable markets, like player injuries; anything tied to officiating; and outcomes knowable in advance, like whether the first play is a run. Its licensed sportsbook partners already follow that list. The exchanges and the CFTC, it says, have declined. State sportsbooks generally require bettors to be 21; the CFTC allows 18. And the CFTC has about 543 employees for the entire country and every kind of derivative, while Nevada's and Pennsylvania's gaming regulators each have close to 400.

That is why the NFL's position is not hypocritical, though it is easy to make it sound that way. The league partners with licensed sportsbooks and tells the Supreme Court that Kalshi is gambling. Both can be true, because the line the NFL is drawing is not between betting and no betting. It is between betting someone polices and betting no one does.

The counterargument is real. Kalshi says it cannot operate under 50 different state regulators, and a national market with one federal rulebook is a legitimate policy choice. The Third Circuit's reading has textual support: the statute's definition of swap is broad. And the NFL's own interest is not purely civic. It profits from licensed betting and has a commercial stake in which system it negotiates with.

But on the question the Court is actually being asked, whether to take the case, the NFL's argument is hard to answer. Three appeals courts have split, billions of dollars move on NFL games every week, and the rules depend on which state the bettor is standing in.

Right now, Kalshi. It holds a Third Circuit win and an extension to November 9, and every month without a ruling is another month operating under the most favorable court. The states hold the numbers, with 39 states and DC behind New Jersey, plus wins in two circuits. The NFL holds something neither side has: the product. More than half of prediction-market volume on its biggest day was NFL games, which gives the league real weight with the CFTC and Congress whichever way the Court goes.

The NFL told the Court it can live with either answer. It isn't fighting betting on its games. It's fighting betting nobody polices, and it wants the Court to say who the cop is.

Kalshi responds by November 9. The Court could consider the petition at a conference as early as December, and if it takes the case, a decision would likely come in 2027. Watch the CFTC's pending event-contract rulemaking, which the NFL criticized in comment letters in May and July, and whether the exchanges adopt any of the league's prohibited-bet categories voluntarily before the Court acts. If the Court declines, the split stays in place, and whether Kalshi's sports contracts are legal will keep depending on which federal circuit a bettor lives in.