NFL Tells Supreme Court Sports Contracts Are Gambling, Not Swaps
The NFL told the US Supreme Court on October 8 that sports event contracts sold by prediction-market platforms like Kalshi are a form of gambling, not the federally regulated financial "swaps" the industry claims they are. The league's amicus brief backs New Jersey's push to get the Court to settle a question that's been splitting federal appeals courts for most of 2026: can states regulate sports-outcome contracts as betting, or does federal commodities law put them beyond state reach?
A circuit split headed for the Supreme Court
The case, Flaherty v. KalshiEX, LLC (No. 26-299), grew out of New Jersey's fight to apply its gambling law to Kalshi's sports contracts. The Third Circuit ruled against New Jersey in April, finding the contracts qualify as swaps under the Commodity Exchange Act and are therefore shielded from state gambling regulation. The Sixth and Ninth Circuits later reached the opposite conclusion in separate cases, in September and August respectively, teeing up exactly the kind of circuit split the Supreme Court typically steps in to resolve. New Jersey petitioned the Court for review, and Kalshi's response is due November 9.
What the NFL is arguing
The league's brief leans on a specific statutory distinction: a swap is supposed to hedge a risk the parties already have, while a sports contract manufactures a brand-new risk purely for entertainment, which the NFL argues takes it outside the Commodity Exchange Act's definition entirely. It also disputes that Congress, through Dodd-Frank, handed the CFTC exclusive power to override state betting law for these products. Beyond the legal theory, the league pressed for specific guardrails prediction markets don't currently follow — a minimum age of 21, use of the NFL's own banned-bettor list, and limits on contracts tied to a single player's outcome, injuries, officiating, or events "knowable in advance." The brief cited figures showing NFL-linked contracts made up roughly $1.8 billion of $3.3 billion in total prediction-market volume on the first Sunday of this season — more than half — and urged the Court to "grant certiorari now to provide clarity before another NFL season goes by."
A crowded brief-filing week
The NFL wasn't alone. Ohio, 38 other states, and the District of Columbia filed in support of New Jersey's position on October 7, followed a day later by the American Gaming Association, roughly 145 Indian tribes, former CFTC chairman Gary Gensler, and former Senator Christopher Dodd. Kalshi pushed back through a spokeswoman, who said the CFTC is "actively policing sports-related markets," pointing to existing federal oversight as sufficient without new state intervention.
Why it matters to US bettors
If the Supreme Court takes the case and ultimately sides with the states, prediction-market sports contracts could face the same licensing, age, and consumer-protection rules as traditional sportsbooks in states that allow regulated betting — and could be forced out of states that don't. A ruling the other way would let Kalshi, Polymarket, and similar platforms keep operating under federal commodities rules nationwide, regardless of individual state gambling laws. For now, nothing changes immediately; the Court hasn't yet decided whether to hear the case at all.