The National Football League has formally urged the U.S. Supreme Court to take up New Jersey's appeal in Flaherty v. KalshiEX, challenging the legal foundation of Kalshi's sports prediction-market business. In an amicus brief filed Thursday, the league backed state regulators who argue that Kalshi's sports event contracts are gambling products, not 'swaps' subject to exclusive federal oversight by the Commodity Futures Trading Commission.
The dispute stems from a Third Circuit ruling that shielded Kalshi's sports contracts from state gambling laws by treating them as swaps under the CFTC's exclusive jurisdiction. The NFL argued that Dodd-Frank's swap definition covers instruments that hedge existing risk, while a consumer buying a contract on an NFL game outcome generally creates new risk by wagering on an outcome. The Sixth and Ninth Circuits have reached the opposite conclusion, creating a circuit split that the league says only the Supreme Court can resolve.
The NFL detailed grievances with the current CFTC framework. According to the brief, the league asked the CFTC and operators such as Kalshi to ban contracts that could be easily manipulated by players, coaches or officials, those involving injuries or officiating, and contracts whose outcomes are knowable in advance, but those requests were declined. The league also noted that 18-year-olds can trade on Kalshi while most state sportsbooks require bettors to be at least 21, and pointed out that the CFTC has just 543 employees nationwide. Without league-specific lists of prohibited bettors, the brief says, operators' 'nominal insider-trading policies or prohibitions are paper tigers.'
Commercial stakes are substantial. The NFL said contracts tied to its games generated $1.8 billion of the $3.3 billion in prediction-market trading volume recorded on the first Sunday of the current NFL season. The league, represented by former U.S. Attorney General William Barr, wants a Supreme Court ruling before the 2027 season. It is not asking for prediction markets to disappear, but says if the justices side with the Third Circuit, it would push the CFTC, operators, and Congress to adopt stronger integrity and consumer protections.
The brief's significance has been amplified by other filings. Former CFTC and SEC Chair Gary Gensler and former Sen. Christopher Dodd, who helped pass Dodd-Frank, also filed briefs backing New Jersey. Sports gaming attorney Daniel Wallach said the NFL's filing 'meaningfully increases the chances of a cert grant.' Meanwhile, other leagues have taken a more collaborative approach: Major League Baseball named Polymarket its exclusive prediction-market sponsor in March, and the NHL became an early partner with both Kalshi and Polymarket. DraftKings and FanDuel have also launched prediction markets of their own.
If the Supreme Court ultimately rules that sports contracts are not swaps, Kalshi could lose its federal-preemption argument and face state-by-state gambling rules instead of one national CFTC framework. Kalshi's response to New Jersey's cert petition is due November 9.
