The National Football League has formally asked the United States Supreme Court to allow individual states to regulate sports prediction contracts offered by Kalshi, highlighting 1.8 billion dollars in volume tied to its games during a single Sunday. Filed as an amicus curiae brief in the case of Flaherty v. KalshiEX, the intervention escalates a high-stakes legal battle over whether federal derivatives oversight supersedes state gambling laws.
NFL Amicus Brief Details 1.8 Billion Dollar Opening Sunday Volume
The league’s filing before the Supreme Court reveals that out of 3.3 billion dollars traded across prediction markets during the first Sunday of the NFL season, 1.8 billion dollars specifically involved its matchups. According to court filings, the league argues that the Commodity Futures Trading Commission (CFTC) has fallen short of establishing necessary safeguards, pointing out that the federal agency rejected the organization’s proposed list of prohibited contracts—including wagers that could be influenced by a single player, coach, or referee.
The NFL's legal team noted that the CFTC permits trading for individuals aged 18 and older, whereas states generally enforce a 21-and-older threshold for betting. The league's filing also states that the federal regulatory body operates with just 543 employees nationwide, a staffing level the sports organization argues is inadequate to police modern prediction markets. The league urged the justices to intervene “before another NFL season elapses,” as reported in filings covered by Yellow.com.
Legal Disagreement Over Commodity Exchange Act and Federal Swaps
At the center of the dispute is whether sports event contracts qualify as “swaps” under the Commodity Exchange Act, which would place them under the exclusive jurisdiction of the CFTC and shield them from state gambling restrictions. Kalshi maintains that its sports-related contracts traded on a designated contract market fall under federal regulatory authority.
Conversely, the NFL’s brief challenges this definition directly. The league argues that traditional derivatives serve economic functions like risk hedging and price discovery, whereas consumers purchasing event contracts on game outcomes are simply creating new speculative risks. Thirty-nine states and the District of Columbia currently support New Jersey’s regulatory efforts in the case.
Circuit Court Splits Trigger Supreme Court Scrutiny
The jurisdictional clash has created a stark divide among federal appellate courts across the United States. On April 6, the U.S. Court of Appeals for the Third Circuit ruled in favor of Kalshi in the New Jersey dispute. However, subsequent rulings in other jurisdictions have gone the opposite way. On August 28, the Ninth Circuit ruled against the platform regarding Nevada regulations and later blocked its sports markets on two California tribal lands. The Sixth Circuit followed suit on September 25, ruling that Kalshi’s sports event contracts do not meet the legal definition of a swap.
Legal analysts have weighed in on the potential procedural impact of the league’s Supreme Court filing. Daniel Wallach, a gaming law attorney, wrote on X that the amicus brief “significantly increases the odds of a cert grant,” referring to the procedural milestone required for the nation’s highest court to take up the case. Meanwhile, Gary Gensler, who led the CFTC during the enactment of the Dodd-Frank Act, and former Senator Chris Dodd argued in court that Congress never intended to strip states of their authority to regulate sports gambling.
Kalshi Response and the Pending November 9 Deadline
Kalshi has defended its operational framework and market integrity measures. Elisabeth Diana, a company spokesperson, stated that the firm made multiple attempts to collaborate with the league on market integrity “with no response,” adding that every other league except the NFL has agreed to share data. In response, the CFTC maintained that it engaged with the league regarding its regulatory agenda “from day one” while calling the decision to forgo a cooperation agreement regrettable.
Kalshi faces a deadline of November 9 to file its formal response to the petition before the Supreme Court. The justices have not yet announced whether they will grant certiorari to hear the case.
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