The NFL Chooses States, Not the CFTC, in Fight Over Prediction Market Regulation

On Thursday, the NFL filed an amicus brief supporting New Jersey’s cert petition against Kalshi, asking the Supreme Court to clarify whether the Commodity Futures Trading Commission (CFTC) has exclusive jurisdiction to regulate sports wagering on prediction markets.

The NFL’s brief states the league is worried about “increasing consumer harm and risk to game integrity” caused by sports wagering on prediction markets. It accuses the CFTC and platforms like Kalshi of taking a “laissez-faire approach” to adopting safeguards and rules. 

In its brief, the NFL points to platforms such as Kalshi for being unwilling to adopt the league’s list of prohibited wagers to guard against market manipulation and insider trading and requiring anyone wagering on sports to be at least 21 years old. The NFL also argues that the CFTC doesn’t have “adequate staff engaged in oversight and enforcement” because the agency has only 543 employees, compared with the “hundreds of employees covering each state’s gambling industry.”

“I think the NFL is saying that they want prediction markets in the same regulatory boat as traditional sports betting to, I would guess, be able to partner with them as the NHL and Major League Baseball have already done,” says Andrew Brandt, executive director at Villanova University’s Moorad Center for Sports Law.

Unlike its counterparts in MLB, the NHL, and MLS, the NFL has so far resisted partnering with prediction markets. While MLB and the NHL have signed memorandums of understanding with the CFTC to jointly monitor sports-wagering activity on prediction markets and protect the integrity of their sports, the NFL has not. Instead, the league has inked official partnerships with sports betting companies DraftKings, FanDuel, and Fanatics Betting & Gaming. However, NFL executive vice president Jeff Miller told ESPN in March that the agency “values the league’s insights.” Still, given its partnerships with sports gambling firms, the NFL ostensibly has a vested financial interest in the issue; if the states win, a more stringent regulatory regime for prediction markets means less competition for the league’s sportsbook partners.

In September, before the start of the new season, ABC News reported that the NFL sent a letter to sports prediction markets listing prohibited wagers it wanted platforms to remove. In the letter, the NFL asked prediction markets to stop “offering objectionable bets that threaten the integrity of our games,” such as the outcome of a field goal, a quarterback’s first pass, or the yards a running back gets on his first carry.  

It’s hard to see what’s so objectionable about the wagers, given that the league’s partners, DraftKings and FanDuel, both offer similar bets on the outcome of future plays or on who will catch a pass on a particular drive. The league’s desire to limit wagers on officiating decisions—such as how many flags will be thrown in a game—out of fear of compromising a contest’s integrity is understandable. Of course, the outcome of a contract matters most to the person wagering. But if an official is compromised by wagering on decisions they make as a league employee, the onus for discipline and oversight should fall on the NFL, not trading platforms.

Sports wagering is incredibly popular in America, particularly prediction markets. The 2026 American Sports Fanship Survey by the Siena Research Institute and St. Bonaventure University’s Jandoli School of Communication found that 15 percent of Americans have used prediction markets to wager on sporting events. Despite their popularity with a significant segment of the population, these platforms have drawn intense backlash from state and federal lawmakers. 

This may be because prediction markets operate under federal regulations, exempting them from the fees and state taxes levied on traditional sportsbooks. “It’s grossly unfair to [traditional sportsbooks] to have [prediction markets] offer a product that’s almost identical to the products that are offered by prediction markets without subjecting prediction markets to the same taxes and regulations,” Victor Matheson, an economics and accounting professor at the College of the Holy Cross, tells Reason. 

Under federal law, the CFTC has “exclusive jurisdiction over transactions involving swaps…traded or executed” on prediction markets. Yet in decisions by the 6th and 9th Circuit Courts of Appeals against Kalshi, judges have declined to read the federal definition of a swap so broadly as to include the kinds of sports-event contracts offered by prediction platforms. In an amicus brief filed by 39 states and Washington, D.C., the states contend that the legal uncertainty has left them “at an impasse over who can regulate” prediction markets. 

In its August ruling, the 9th Circuit found Kalshi’s argument that its event contracts differed from the kind of betting offered on traditional sportsbooks “unpersuasive.” Similarly, when it ruled against Kalshi in September, the 6th Circuit found that Kalshi’s sports-event contracts do not “satisfy the statutory definition of a ‘swap’ to fall within the scope of the CFTC’s ‘exclusive jurisdiction.'” Even “assuming Kalshi’s sports-event contracts are swaps for purposes of this analysis,” the court found that state gambling laws are “neither expressly nor impliedly preempted” by federal law. 

The loss of revenue and ability to skirt state governance have clearly rankled state officials, leaving prediction markets engaged in ongoing legal battles across 20 states. At the federal level, the Government Accountability Office (GAO) is also investigating the agency, spurred by a July letter from Sen. Elizabeth Warren (D–Mass.) alleging the CFTC is ill-equipped to regulate derivative markets “due to staffing cuts that threaten to weaken its enforcement.” 

Warren isn’t the only lawmaker with the agency in their crosshairs; in its response, the GAO notes it received a “related request” to investigate the CFTC’s reduced staffing. With the matter pitting state regulators against a federal agency, federal legislators may ultimately have to resolve the jurisdiction issue.

The CFTC is “the most efficient regulator of prediction markets,” writes Jacob James Rich, policy analyst at Reason Foundation, the nonprofit that publishes Reason. However, the “threat of future presidential administrations having broad authority to change CFTC policy,” along with legal challenges from the states, means it may not be the best long-term option for doing so. 

Kalshi has until November 9 to file a response. ESPN reported that the Supreme Court is unlikely to decide whether to take the case “until December at the earliest.” Regardless of what the Court does, one thing is clear: Lawmakers have little trust that the adults in their states know best how to spend their money.