State attorneys general petition Supreme Court on prediction market rules

Attorneys general from 39 states ask Supreme Court to settle prediction market law

Roger Goodell does not typically file legal briefs. When the NFL commissioner directed the league's lawyers to submit to the Supreme Court last week, it was the clearest sign yet that the people with the most to lose from prediction markets are no longer waiting for Congress to act.

The brief itself is worth reading slowly. The NFL's argument turns on a single word: swaps. Under Dodd-Frank, contracts classified as swaps fall under the CFTC's exclusive jurisdiction, which is why Kalshi has spent the past two years arguing that sports event contracts are exactly that. The league disagrees, and its reasoning is historically grounded. When Congress passed Dodd-Frank in 2010, it was responding to the collapse of mortgage-backed derivatives, not to DraftKings or anything that looked like it. The Professional and Amateur Sports Protection Act still banned sports betting in most of the country. The NFL's position is that a Congress legislating in that environment could not have intended to federalise sports wagering by accident, tucked inside a financial reform bill.

That argument is not frivolous. It is the same logic the Sixth and Ninth Circuits used when they ruled in favour of Ohio, Tennessee, Nevada and California. The Third Circuit reached the opposite conclusion when it blocked New Jersey from enforcing state gambling law against Kalshi. Three circuits, three different answers, on questions that are not peripheral — whether the contracts are swaps, whether CEA preemption applies, whether states have any authority at all.

Thirty-nine attorneys general, plus the District of Columbia, have now filed their own brief asking the Supreme Court to take the case. The California Cabazon Band of Cahuilla Indians filed separately, arguing that tribal gaming revenue is structurally at risk if federal preemption holds. The International Association of Gaming Regulators and the North American Gaming Regulators Association added their weight. That is an unusual coalition. Gaming regulators and tribal governments do not typically coordinate with state attorneys general on the same filing. The breadth of it tells you something about how the states read the current circuit landscape: not as a temporary ambiguity, but as a condition that, left unresolved, permanently advantages federal operators over every state-licensed alternative.

I have been watching the regulatory arc of prediction markets in the United States for several years. The pattern I keep seeing is that federal preemption arguments tend to be strongest precisely when the underlying market is thinnest — early, before liquidity deepens, before volume creates political facts on the ground. Kalshi is past that stage. The contracts trade. The question of who governs them is no longer theoretical, and the circuit split is now wide enough that the Supreme Court would need a reason to refuse certiorari rather than a reason to grant it.

A ruling, if the Court takes the case, arrives no earlier than mid-2027. In the meantime, the states with Sixth and Ninth Circuit cover can enforce. Those without it cannot. Kalshi operates differently in Ohio than it does in New Jersey, and that asymmetry is itself a market structure problem — it determines where volume aggregates and where it doesn't, which is not a question any prediction market can price cleanly until the jurisdictional lines are fixed.

The NFL is not partnered with a prediction market operator. Every other major sports league has moved toward accommodation. Goodell has not, and the brief explains why: the league's integrity framework depends on prohibited wager lists that prediction platforms have shown no obligation to follow under CFTC oversight. Whether a federal regulator with a constrained staff can enforce those protections at scale is an open question, and the NFL has decided not to wait for the answer.