NFL Asks Supreme Court to Put Booming Prediction Market Under States Control

On the first Sunday of the current National Football League season, more than $3.3 billion moved through online exchanges known as prediction markets. Over half of that — $1.8 billion — was traded directly on the outcome of NFL games.Now the country’s most powerful sports league is asking the Supreme Court to address a divisive question: Should these online financial wagers continue to be regulated by the federal government or is it sports betting that should be controlled by the states?In a legal brief filed in support of a challenge brought by New Jersey, the NFL backs a coalition of 38 states asking the Supreme Court to give the states the power to regulate prediction markets as they do casino gambling and sports betting. The league argued that without high court intervention, commercial operators will continue to exploit a regulatory gap, creating risks to the public and the sport.“Any delay from the Court will result in increasing consumer harm and risk to game integrity,” the NFL wrote in its brief.Unlike traditional sportsbooks where a bettor wagers against the house at fixed odds, prediction markets function like mini stock exchanges. Instead of buying shares of corporate stock, users trade financial instruments called “event contracts.” The contracts result from questions such as “Will the Las Vegas Raiders win on Sunday?” Share prices can fluctuate between $0 and $1 based on market supply and demand.If market traders collectively believe there is a 70 percent chance the team wins, the “Yes” contract trades at 70 cents per share. If the team wins, the contract pays out $1.00, netting the buyer a 30 percent profit. If the team loses, the contract settles at zero. Traders can sell their contracts before a game ends to lock in profits or cut losses, prompting proponents to argue these platforms serve as real-time forecasting tools.Because the contracts are framed as commodities rather than wagers, major prediction platforms like Kalshi and Polymarket argue they fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC), the federal agency that oversees such things as gold futures, oil contracts and agricultural derivatives.The federal oversight creates a path to avoid state regulations. In California and Texas, commercial sports betting remains illegal. But residents in those states can legally trade millions of dollars on NFL games using the federal prediction exchanges.“Absent the clarity that only this Court can provide, (predication market) operators will continue exploiting the gap between state and federal regulation,” NFL lawyers wrote in the league’s brief to the high court.The NFL argued that the CFTC lacks the manpower to safeguard professional sports and said the prediction markets had declined to adopt several restrictions proposed by the league, including raising the minimum trading age to 21 from 18 and banning player-specific prop bets.“Without adequate staff engaged in oversight and enforcement, even the best regulations cannot meaningfully ensure game integrity and consumer protection,” the NFL lawyers wrote.The major prediction market operators — Kalshi and Polymarket — reject the NFL’s claim, saying that a unified federal standard is better than operating under 50 different state laws. Elisabeth Diana, a spokesman for Kalshi, emphasized the platform already works directly with several professional sports, including Major League Baseball and the National Hockey League, to maintain market integrity.Polymarket also signed a deal with Major League Baseball and has partnerships with the NHL and soccer. Meanwhile, sports betting leaders DraftKings and FanDuel have launched their own prediction platforms.Interestingly, Truth Social, used often by President Trump, is planning to offer an in-platform prediction market through a partnership with Crypto.com. Donald Trump Jr. holds advisory roles at both Polymarket and Kalshi.A spokesman for Polymarket said its company supports a “harmonized federal framework” that protects consumers better than state legislation.“Contrary to the NFL’s statements, the CFTC is actively policing sports-related markets, which are now listed on nearly every U.S. commodities exchange,” Ms. Diana said. “The CFTC’s ongoing rulemaking addresses many of the NFL’s supposed concerns. And those rules sit atop the same comprehensive system of federal enforcement that protects trillions of dollars of transactions in U.S. markets.”The states aren’t backing down. Ohio filed a brief this week, urging the Supreme Court to side with New Jersey and preserve each state’s power to regulate prediction markets. The filing was reportedly backed by 38 states.Roughly 20 states are involved in active litigation over the governance of prediction markets and appeals courts have delivered differing opinions, prompting the Supreme Court to consider the issue. Until the justices issue a definitive ruling, billions of dollars will continue to flow through a gray zone sitting squarely at the intersection of Wall Street and gambling on professional sports.

NFL Asks Supreme Court to Put Booming Prediction Market Under States Control

NFL Asks Supreme Court to Put Booming Prediction Market Under States Control

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