The National Football League has entered the legal fray over who should regulate prediction markets, filing a brief with the Supreme Court that sides with state authority in a dispute that has divided federal courts and implicated billions of dollars in sports-related trading.
In its amicus brief filed this week, the NFL argued that states, which already possess the regulatory framework for legal sports betting operations, are better equipped to oversee prediction markets related to sporting events. The league is supporting New Jersey’s petition asking the Supreme Court to clarify the governing authority over these markets, which allow participants to trade or wager on the outcomes of future events.
At the heart of the dispute lies a fundamental question of jurisdiction. The Commodity Futures Trading Commission maintains it holds exclusive federal authority over prediction markets. States counter that these platforms, which typically offer yes-or-no propositions on future events, constitute a form of gambling and therefore fall within state regulatory powers.
The stakes are substantial. According to the NFL’s filing, more than half of the trading volume on prediction markets during the first Sunday of this season involved the league, representing $1.8 billion of the $3.3 billion total volume. Such figures underscore the massive scale of an industry operating in what the NFL describes as a regulatory void.
“Absent the clarity that only this Court can provide, operators will continue exploiting the gap between state and federal regulation, endangering consumers and the integrity of sports events across the country,” NFL attorneys wrote in their brief. The league warned that delays would result in increasing consumer harm and threats to game integrity.
The prediction market operators have pushed back against these characterizations. Representatives from Kalshi pointed to partnerships with the National Hockey League, Major League Baseball, and other sports organizations as evidence of their commitment to market integrity. They noted that the CFTC actively polices sports-related markets and is engaged in ongoing rulemaking that addresses many concerns raised by the NFL.
A spokesperson for Polymarket similarly emphasized the company’s commitment to game integrity while advocating for a unified federal framework rather than what they characterized as a patchwork of disconnected state laws.
The breadth of state concern became evident when Ohio filed a brief supporting New Jersey’s position, backed by 38 states with both Republican and Democratic attorneys general. The coalition includes major states such as Arkansas, California, Illinois, Missouri, New York, South Carolina, and Pennsylvania.
Roughly 20 states are currently engaged in litigation over prediction markets. A split among federal appeals courts has emerged, with the 6th and 9th Circuit Courts of Appeals issuing conflicting rulings. Such circuit splits typically increase the likelihood that the Supreme Court will grant review.
The case represents a modern iteration of longstanding tensions in American federalism. As new technologies and business models emerge, questions of regulatory authority often require judicial clarification. The Supreme Court now faces the task of determining whether prediction markets on sporting events represent a new frontier in commodity trading, properly regulated at the federal level, or whether they constitute gambling operations that states have traditionally overseen.
The court’s decision, should it choose to hear the case, will have far-reaching implications for an industry handling billions of dollars in transactions and affecting the integrity of professional sports nationwide.
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