NFL backs New Jersey in Supreme Court fight over Kalshi sports contracts
In brief
- NFL filed an amicus brief Thursday backing New Jersey's Supreme Court appeal against Kalshi.
- Third Circuit ruled Kalshi's sports contracts are swaps; Sixth and Ninth Circuits ruled the opposite.
- NFL contracts drew $1.8 billion of $3.3 billion traded on the season's first Sunday, per the brief.
- Attorney Daniel Wallach said the brief meaningfully increases the chances of a cert grant.
A split only the justices can settle
The Sixth and Ninth Circuits ruled the opposite way. That's a circuit split.
The league's core argument (as laid out in the brief) is that Dodd-Frank's definition of a swap covers instruments that hedge existing risk, not bets that create new risk. Read that way, sports contracts land under state gambling oversight rather than federal swaps rules. The NFL is represented by former U.S. Attorney General William Barr, and it wants a ruling before the 2027 season.
What the league says it asked for
The NFL said it asked the CFTC and operators like Kalshi to ban certain contracts, including ones a single person could easily manipulate or that involve injuries or officiating. According to the league, they declined. The brief also noted that 18-year-olds can trade on Kalshi while most states require sports bettors to be 21, and that the CFTC has 543 employees nationwide (a figure the NFL used to suggest the agency is understaffed to police these markets).
Then there's volume.
According to the brief, NFL-related contracts accounted for $1.8 billion of the $3.3 billion traded across prediction markets on the season's first Sunday. If the justices side with the Third Circuit, the NFL said it would redouble efforts to persuade the CFTC, operators and Congress to adopt stronger integrity and consumer protections.
Wallach says cert odds just went up
The Court hasn't said whether it'll hear the case. Sports gaming attorney Daniel Wallach said in a post on X that the brief "meaningfully increases the chances of a cert grant."
"It is extremely telling that the sports league which has most forcefully advocated for federal regulation is essentially saying 'this ain't it,'" Wallach wrote.
Wallach also noted that former CFTC and SEC Chair Gary Gensler and former Sen. Christopher Dodd filed briefs backing New Jersey, Decrypt reported.
Other leagues haven't taken the same line. MLB named Polymarket its exclusive prediction market sponsor in March and signed an integrity agreement with the CFTC, while the NHL became the first major league to license its trademarks to prediction markets. DraftKings and FanDuel have launched prediction markets of their own, and Bernstein analysts see a $10 trillion opportunity in the sector. (Decrypt's parent company Dastan operates Myriad, a prediction market unavailable to U.S. residents.)
Frequently asked questions
What is the circuit split over Kalshi's sports contracts?
The Third Circuit ruled that Kalshi's sports event contracts are swaps under the CFTC's exclusive jurisdiction, shielding them from state gambling laws. The Sixth and Ninth Circuits ruled the opposite way, creating a split that New Jersey has asked the Supreme Court to resolve.
Why does the NFL say sports event contracts aren't swaps?
In its amicus brief, the NFL argued that Dodd-Frank's definition of a swap covers instruments that hedge existing risk, not bets that create new risk. On that reading, sports contracts belong under state gambling oversight rather than the CFTC.
Has the Supreme Court agreed to hear New Jersey's appeal?
No grant has been reported. Sports gaming attorney Daniel Wallach said on X that the NFL's brief meaningfully increases the chances of a cert grant, and the league wants a ruling before the 2027 season.
