- The NFL has said sports prediction contracts should be designated as gambling instead of financial derivatives.
- In an amicus brief on Thursday, the NFL argued that sports prediction contracts are gambling subject to state regulation, not CFTC-overseen swaps, in the case Flaherty v. KalshiEX.
- The court has not ruled or agreed to hear the case.
The National Football League (NFL) has requested that the US Supreme Court designate sports prediction agreements as gambling instead of financial derivatives.
The classification could impact the way Kalshi and its competitors respond to federal agencies or state gambling authorities and, in turn, the growth of the industry.
The league’s argument against calling them swaps
An amicus brief filed on Thursday shows that the NFL is backing petitioners from New Jersey in their quest to challenge the Third Circuit ruling that gave the Commodity Futures Trading Commission exclusive authority over all issues pertaining to sports contracts.
According to the league, traditional swaps help mitigate existing financial risks. However, it is the sports contracts that generate risk exerted by the results of a sports game. The league expressed the opinion that it is a constitutional issue since there are conflicting decisions of different appeals courts involved in the process.
The NFL looks for strict measures against manipulation, requires higher minimum ages, and demands communication with the league. The Supreme Court has not yet made a decision on whether to accept the case for consideration.
Kalshi pushes back, and the leagues disagree
Kalshi dismissed the NFL’s claims and argued in favor of federal regulation and integrity provisions that have already been established.
Other sports leagues have welcomed prediction markets. Major League Baseball partnered with Polymarket, the National Hockey League struck deals with both Kalshi and Polymarket, and Major League Soccer signed an exclusive agreement with Polymarket.
Expert in gaming law, Daniel Wallach, called the NFL’s intervention important as the move increases the likelihood of the Supreme Court taking up the case.
What the trading data shows about exposure
The stakes become clearer in the trading figures. The NFL reported that $1.8 billion of the $3.3 billion traded on the season’s opening Sunday involved its games.
Artemis data showed $330.4 billion in year-to-date prediction-market volume as of October 8. Sports represented roughly 44%, followed by exotics at 32% and crypto at 15.1%.
The total amount processed by Kalshi is $259.2 billion, with $107.6 billion from sports trading (41.5%). Polymarket, on the other hand, recorded $71.2 billion with a contribution of $37.9 billion from sports trading (53.2%). Thus, Kalshi’s total sports volume is significantly more than that of Polymarket, while Polymarket’s sports trading plays a larger role in the overall trading activities of the platform.
According to Pew Research, the monthly combined trading of the two companies has increased dramatically, from $26 billion in May to $53 billion in July. At the same time, Americans bet around $40 billion via licensed sportsbooks in the first quarter. The aforementioned amounts reflect the trading or bets rather than platform revenue.
US uncertainty against Europe’s clearer line
The gap in regulation continues to exist. Brookings indicated that there is tension between federal derivatives regulation and state gambling legislation.
The American Institute for Boys and Men has raised another problem about allowing those of 18 years old to take part in prediction markets despite the fact that all the sportsbooks require customers to be 21.
Europe takes a different approach. ESMA says qualifying binary event contracts face existing retail restrictions and investment-firm authorization requirements.
Why the growth story depends on the ruling
Cryptopolitan previously reported Bernstein’s projection that annual prediction-market volume could reach $10 trillion by 2035. Yet the firm expects US regulatory clarity no earlier than 2027–2028.
State-level regulation could raise licensing costs, taxes, and compliance burdens, potentially weakening liquidity and slowing expansion.
A sports-focused ruling would not automatically settle crypto or political contracts. Still, it could reshape investment decisions and global competition by shaping federal oversight.
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FAQs
What is the NFL asking the Supreme Court to do?
The NFL filed an amicus brief in Flaherty v. KalshiEX supporting a request for the court to hear the case and backing New Jersey regulators, arguing that sports event contracts are gambling under state authority rather than swaps under the CFTC's federal derivatives framework.
How does Kalshi respond to the NFL's position?
Kalshi rejected the argument, saying it already prioritizes market integrity, that the CFTC is policing sports markets, and that consistent federal oversight is better than state-by-state regulation, according to The Block.
How much prediction-market trading is tied to sports?
Sports accounted for 44% of the $330.4 billion in 2026 year-to-date volume as of October 8, per Artemis data, and nearly $2 billion of the $3.3 billion traded on the first Sunday of the NFL season was linked to NFL events, the league said.
Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
Ibiam Wayas
Ibiam Wayas has covered the crypto news beat since 2019. He studied Computer Science at National Open University of Nigeria. His work has appeared on various crypto news platforms, including Coinfomania, Crypto News Australia, and AltcoinBuzz. Drawing on his background in Computer Science, he now focuses on crypto, robotics, and longevity news.
