NFL Wants Supreme Court To Blow Whistle On Kalshi
By Daily Caller News Foundation (/journals/dcnf)
The NFL urged the Supreme Court to protect states’ authority to regulate sports gambling Thursday, arguing that prediction markets such as Kalshi are effectively sportsbooks operating under the guise of federally regulated financial exchanges.
In an amicus brief supporting New Jersey regulators, the league argued that sports prediction contracts should be subject to state gambling laws rather than exclusively overseen by the Commodity Futures Trading Commission (CFTC). The dispute could determine whether prediction markets can continue offering sports wagers nationwide, including in states where traditional sports betting is prohibited.
The NFL pointed to the enormous scale of the emerging industry, saying football accounted for $1.8 billion in prediction market trading on the first Sunday of the season, more than half of all trading volume that day, according to CNBC.
The league warned that certain contracts could threaten the integrity of professional sports, particularly wagers tied to outcomes individual players could deliberately influence, such as missed field goals or fumbles.
The NFL also raised concerns about bets involving injuries, officiating decisions and information that players, coaches or other insiders could know before the public.
“Neither the CFTC nor the prediction market companies themselves— despite our persistent urging — have banned categories of bets susceptible to manipulation or set a 21 age limit,” the NFL told CNBC.
Traditional sportsbooks generally require customers to be at least 21, while Kalshi allows customers as young as 18.
The NFL also questioned whether federal regulators had sufficient resources to oversee the booming industry.
“In the end, we believe that given the current resource constraints of the CFTC, this is a job better left to the states,” the league told CNBC.
The legal battle centers on whether the federal Commodity Exchange Act overrides states’ traditional authority to regulate gambling. Kalshi argues that its event contracts qualify as financial derivatives under federal jurisdiction rather than conventional sports wagers.
A federal appeals court ruled in August that Nevada could enforce its gambling laws against Kalshi, conflicting with an earlier decision favoring the company in New Jersey. The conflicting rulings set the stage for the Supreme Court dispute.
Problem rates among sports bettors are at least twice those of gamblers overall, according to GamblingHarm.org. Nearly 20% of online sports bettors have problems reaching the level of clinical addiction, as 52% of bettors have chased a bet, 50% used a gambling addiction tool in a sportsbook app and 37% felt ashamed after losing.
One-quarter of sports bettors say they were unable to pay a bill because of wagers they made, with some saying they bet their rent money on sporting events, according to U.S. News. Almost one third, 30%, of sports bettors said they were in debt from gambling.
Forty-three percent of Americans said sports betting is bad for society, while 22% said the same in 2022, according to Pew Research.
A former college student lost more than $100,000 sports gambling before turning to Kalshi after moving home to Utah, where traditional sports betting was prohibited. He subsequently lost more than $12,000 on the platform
Marlene Warner, CEO of the Massachusetts Council on Gaming and Health, previously told the DCNF that prediction markets operated in a regulatory gray area that made their gambling risks difficult to assess.
The industry also pushed further into traditional finance. Kalshi asked the CFTC in September to approve margin trading for qualifying institutional participants on certain event contracts, potentially allowing traders to take positions without posting the full amount of collateral upfront. The proposal excluded sports contracts.
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All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.