The NFL is urging the Supreme Court to rule on prediction markets like Kalshi and Polymarket

The NFL is requesting the Supreme Court to rule on the regulation of prediction markets, following a trading volume of $1.8 billion on the first Sunday of the current season. The league argues that states, rather than the federal government, are better equipped to oversee sports-related contracts due to the current regulatory landscape.

The NFL filed a brief in support of New Jersey's request for a high court decision on the governing authority for prediction markets, which allow users to trade or wager on future events. The U.S. Commodity Futures Trading Commission (CFTC) claims exclusive jurisdiction over these markets, while states contend that the diverse questions typically found in prediction markets constitute gambling and should fall under state regulation.

Lawyers for the NFL argue that without clear guidelines from the Supreme Court, operators of these markets will continue exploiting the regulatory gap, posing risks to consumers and sports event integrity. The NFL claims that on the first Sunday of the season, over half of the trading volume on prediction markets was related to the league, and that any delay in court decisions would exacerbate consumer harm and threaten game integrity.

Kalshi spokeswoman Elisabeth Diana emphasized market integrity and highlighted the company's partnerships with various sports organizations as evidence. Diana maintains that the CFTC is actively policing sports-related markets and that the regulatory framework in place already addresses many of the NFL's concerns. Polymarket spokesperson also expressed support for preserving game integrity and is working on a federal framework to provide a more consistent approach to integrity compared to disparate state laws.

Ohio joined New Jersey's request for the Supreme Court to side with them, backed by 38 states including Republican and Democratic attorneys general. Roughly 20 states are involved in litigation over prediction markets, and a split exists between appeals courts, increasing the likelihood of the Supreme Court taking up the issue. The NFL also questions the CFTC's enforcement capabilities, citing a significant difference in staffing between the two entities.

The GAO is currently investigating the staffing level at the CFTC, awaiting the start of the work due to a request by Sen. Elizabeth Warren. The CFTC has engaged with the NFL regarding rulemaking agendas and policy priorities, but has declined to sign a memorandum of understanding with the league.