NFL States: Sports Contracts in Prediction Markets Should Be Regulated by States

Coin Circle (120Btc.coM): On October 8, Beijing time, the National Football League (NFL) officially expressed its position to the U.S. Supreme Court, emphasizing that sports derivative contracts provided by prediction market platforms essentially belong to gambling activities, and their jurisdiction should be assigned to state governments. According to publicly available case documents, the NFL has submitted an amicus brief to the court, clearly supporting the appeal process initiated by the New Jersey Division of Gaming Enforcement against the prediction market platform Kalshi, urging the Supreme Court to review the case.

In the lawsuit numbered 26-299, New Jersey submitted a motion to vacate on September 2, Beijing time, intending to overturn the ruling made by the Third Circuit Court of Appeals in April this year. Previously, the Third Circuit Court ruled that the sports event contracts issued by the Kalshi platform fall under the exclusive jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC), thereby excluding the applicability of state gambling regulations.

Concerns Over Risk Control Mechanisms and Regulatory Personnel

The scale of sports funding in prediction markets is not to be underestimated. The NFL disclosed in its submitted documents that on the first Sunday of this season, among the total transaction volume of $3.3 billion across all prediction markets, as much as $1.8 billion was directly related to NFL events, accounting for more than half. This brief was drafted by legal experts including former Attorney General William Barr and is fully endorsed by the NFL, with no other professional sports leagues participating in the endorsement.

Compared to traditional channels, the compliance standards of emerging platforms have raised strong concerns for the NFL. The legal sports betting system has established mature risk isolation mechanisms, such as blocking specific high-risk betting types and strict age access systems, while prediction markets operate outside these constraints. The documents state that under the laws of the vast majority of states, individuals aged 18 are strictly prohibited from participating in event betting through compliant channels like Caesars, yet they can easily establish similar exposures on the Kalshi platform. Furthermore, the NFL compared regulatory resources: the CFTC has only 543 staff nationwide, while the gaming regulatory agencies in Nevada and Pennsylvania each have nearly 400 dedicated personnel, highlighting the federal agency's limitations in decentralized regulation.

Court Insights Face Fragmentation, Market Landscape Accelerates Differentiation

Based on compliance considerations, the NFL accuses Kalshi of failing to engage in substantive cooperation with it regarding regulatory risks and emphasizes that the prediction market lacks safeguards against event manipulation and a 21-year access threshold. Therefore, the NFL urges the Supreme Court to expedite the handling of this case to resolve disputes before the next season kicks off. There has been a clear fracture in legal understanding among the circuit courts: the Sixth and Ninth Circuit Courts have recently ruled that Kalshi's sports contracts do not meet the statutory standards for federal exchange contracts, which sharply contrasts with the Third Circuit Court's viewpoint.

The case tracking system shows that this appeal has gathered multiple opinions, including from the National Council of Legislators from Gaming States (NCLGS), major gaming regulatory associations, and documents jointly submitted by 39 states and Washington D.C. on October 7, Beijing time. Currently, Kalshi's deadline for response has been extended to November 9 Beijing time, and the Supreme Court has yet to decide whether to vacate the case.

In the sports business ecosystem, major leagues have shown differentiated attitudes towards prediction markets. Currently, the National Hockey League (NHL) has chosen to establish partnerships with Kalshi and Polymarket; Major League Baseball (MLB) and other organizations have also teamed up with Polymarket. However, the NFL and the National Basketball Association (NBA) continue to maintain a cautious distance from this model.

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