Jeremiyah Love contract gap leaves state regulators with no jurisdiction

On draft day, Kalshi customers traded more contracts on Jeremiyah Love going third overall to Arizona than on any other player in the draft. The number the company reported was 598,464 contracts. Arizona and Massachusetts are reviewing sportsbook activity tied to the Ryan Gold case. Neither state has confirmed it is looking at those Love contracts. No state has.

This is the jurisdictional gap made concrete. Not as a legal argument in a circuit court brief, or a talking point in a CFTC rulemaking — as a specific number, on a specific player, on a specific day, sitting outside every regulatory perimeter that exists.

The circuit split that the NFL wants the Supreme Court to resolve is genuinely unresolved: the Third Circuit accepted Kalshi's swap argument; the Sixth and Ninth did not. When courts reading the same statute reach opposite conclusions, the statute has a gap in it, and the gap is currently large enough for 598,464 contracts to pass through without a single public examination. The NFL's brief to the Supreme Court put the first Sunday of this season's NFL-related prediction market volume at $1.8 billion. At that scale, a jurisdictional gap is not a technical deficiency. It is a structural condition the market has priced and built around.

The staffing comparison the NFL included in its brief is the kind of detail that sounds like advocacy but holds up on inspection. CFTC has 543 employees across the country. Nevada's gaming regulator employs close to 400 people to watch one state. Pennsylvania's is similarly sized. The CFTC's mandate under the Commodity Exchange Act was written for derivatives markets, not for real-time event integrity monitoring during a Sunday afternoon NFL slate. Kalshi's response — that the CFTC actively polices sports markets and that its rulemaking addresses the league's concerns — is a position, not a rebuttal. Active policing of financial derivatives and active surveillance of sports contracts are different operational problems, and the staffing numbers are what they are.

The consensus read on this dispute treats it as a binary: federal jurisdiction wins or state jurisdiction wins, and one side is right about what Congress intended. The reporting on this case has been framed accordingly. That framing is probably wrong about where this lands, because the Supreme Court does not have to resolve the structural question to move the case. It can grant certiorari, narrow the question, and send the CFTC's rulemaking back into play without deciding whether event contracts are swaps. That outcome — a procedural deflection rather than a substantive ruling — would leave the 598,464 Love contracts exactly where they are now: in a regulatory space that several states want to reach and cannot.

CFTC Chairman Michael Selig has said that Americans use event contracts to hedge risks and speculate, and that these products fall within the agency's remit under the Commodity Exchange Act. The interim final rule separating casino-style gambling from event contracts took effect on Federal Register publication. The proposed swap classification is still in comment. That sequence matters: the line excluding sportsbooks is already drawn, but the line including prediction markets is not yet final. Between those two lines is where the 598,464 contracts live, and neither Arizona nor Massachusetts has found a way in.