NFL is taking the battle over regulating sports betting to the U.S. Supreme Court, urging the justices to rule on whether states should continue to have control over such activities.
In an amicus curiae brief supporting the confrontation between New Jersey's regulatory authorities and Kalshi, the National Football League of the United States (NFL) argued that sports betting contracts are essentially forms of gambling, rather than financial swaps that should be exclusively regulated by the federal government, as Kalshi has consistently claimed in court.
NFL indicates that on the first Sunday of this season, football-related transactions accounted for $1.8 billion of the predicted market transaction volume, exceeding half of the total trading volume.
According to NFL, they are not opposed to market forecasting. The alliance stated to CNBC: "In the end, we believe that, given the current resource limitations of the Commodity Futures Trading Commission (CFTC) in the United States, this task is better suited to be handled by the individual states."
The league is concerned that certain contracts are vulnerable to manipulation, such as in scoring goals, where players might intentionally miss shots; or wide receivers might deliberately drop the ball. NFL is also worried about bets that are linked to injuries, referee decisions, and other information that insiders might be aware of in advance.
NFL requires that bettors be at least 21 years of age, which is also the requirement in most states for sports betting. However, on the Kalshi platform, customers can be as young as 18 years old.
In a statement provided to CNBC, NFL stated: 'Neither CFTC nor the prediction market companies themselves – despite our continuous urging – have prohibited those types of bets that are easily manipulable, nor have they set a minimum age requirement of 21 years.'
NFL states that this is related to the integrity of the competition.
NFL has always maintained a tough stance on the prediction market, stating that this move is to maintain the integrity of the competition. The alliance continues to enforce a ban on advertisements on prediction platforms.
In an interview conducted by CNBC Sport in Australia on September 10th, the alliance president Roger Goodell emphasized that before considering cooperation with these new markets, the alliance hopes to see stronger protective measures in place. He said, "We don't feel that we must be the first to do so. We believe that in the end, we will be right, and the best approach is to remain patient."
Other alliances have adopted different approaches. NHL has established cooperative relationships with Kalshi and Polymarket. The Major League Baseball (MLB), the National Football League (Major League Soccer), and UFC have reached partnerships with Polymarket. NFL, NBA, and PGA have not yet signed any agreements regarding predictive markets.
The Federal Appeals Court has previously rendered contradictory rulings regarding whether states may enforce their own gambling laws and override the authority of the federal regulatory agency, the Commodity Futures Trading Commission (CFTC).
NFL wrote in the opinion letter: 'However, gambling regulation is part of the sovereign police powers of each state, a fact that has long been established. On what constitutional authority can Congress override the traditional police powers of each state to regulate gambling within their own territories?'
Revelation: Kalshi has a business relationship with CNBC, which includes a small amount of equity investment and cooperation in customer acquisition.
