Sports Betting Regulator Challenges Prediction Markets Over Official Contracts

Officiating Contracts Put Prediction Markets on a Collision Course With the CEA

The NFL's second formal letter of 2026 asked prediction market operators to stop listing contracts tied to penalty flag counts. That request is easier to make than it is to honor, and the legal architecture underneath it is more complicated than the league's compliance team appears to have accounted for.

Sabrina Perel, the NFL's Chief Compliance Officer, framed the ask in terms of competitive integrity and personal safety — language that belongs in a press release but does not appear in the Commodity Exchange Act. Under 7 U.S.C. § 7(a), a designated contract market has an affirmative obligation to list contracts that are not readily susceptible to manipulation. That is the standard the CFTC applied when it approved Kalshi's event contracts, and it is the standard that governs what happens next. Whether a given contract meets or fails that standard is a CFTC determination, not a league preference.

The NFL's letter identifies two distinct categories of concern, and it is worth separating them because the legal weight they carry is different. Contracts tied to whether a kicker misses a field goal or whether a quarterback's first pass is incomplete sit in one bucket: outcomes that one participant can influence. The CFTC's self-certification review process requires exchanges to demonstrate that listed contracts cannot be readily manipulated. If the NFL's factual claim — that a single kicker or quarterback can move a market outcome by their own decision — is accurate, that is an argument the Commission could act on under existing authority. It is also, notably, an argument CME's lawyers did not think to raise when they challenged Kalshi's Bitcoin perpetual contract on label theory.

The second category is different. Contracts on penalty flag counts involve officiating decisions. A referee cannot legally profit from a prediction market on their own calls, and the number of flags thrown in a game is the aggregate output of a crew of seven officials responding to twenty-two players. The manipulation argument there is empirically harder to sustain, which may be why Perel's letter names it last and with less specificity.

The CFTC's motion to dismiss the CME perpetual futures lawsuit, filed this week, contains a sentence that predetermination markets lawyers will be reading carefully: the agency's position is that any registered designated contract market may list similarly structured contracts, and that CME's failure to avail itself of that opportunity undermines its standing to object. The same structural point applies here. If a contract type survives CFTC self-certification, the agency's own framework says the door is open. The NFL's letters do not close it.

What could close it is an enforcement action — a CFTC finding that specific contract categories are readily susceptible to manipulation under Section 5(d)(3) of the CEA. The agency has not taken that position publicly on NFL single-play contracts. Whether it has taken it privately, or whether Perel's letter was coordinated with Commission staff, is not on the public record.