Prediction market roundup: NFL files amicus brief with Supreme Court

Over the last several weeks, the US Supreme Court has handled a slew of briefs urging the nation’s highest court to hear a case that would settle a contentious battle on the future of sports event contracts.

With as much as $1 trillion in notional value up for grabs, the fight has been described as an existential struggle for the sports wagering and derivatives industries. But on Wednesday, states’ rights advocates arguably received a significant boost when the NFL filed an amicus brief with the Court.

In a 32-page brief co-authored by former US Attorney General William Barr, the NFL advised the Court to grant review of Flaherty v. KalshiEx, LLC to preserve the integrity of professional sports events and to protect market participants.

The NFL emphasised that finding clarity in sports prediction markets is critical to preserving sports integrity and establishing consumer protections across the ecosystem. As the US Commodity Futures Trading Commission states its case for exclusive jurisdiction over regulation of the derivatives, the league has held discussions with prediction markets in recent months.

In the brief, however, the NFL asserted that the commission and various operators have resisted the league’s requests to “implement appropriate safeguards” for sports event contracts.

Integrity at the forefront

Within the brief, the NFL outlined a series of event contracts the league deems objectionable. In essence, the NFL reiterated the argument it made weeks earlier when it filed a brief with the CFTC during a comment period for proposed rules on the derivatives. Among the contracts the NFL found objectionable include those on whether a kicker will miss a field goal, the next penalty in a given game and various non-game related transactions such as a phrase mentioned during a broadcast.

“It is at best unclear whether the Commission has the appropriate regulatory framework, oversight capacity and enforcement resources to ensure that prediction markets do not jeopardize game
integrity,” the NFL wrote.

Two major prediction market operators, Kalshi and Polymarket, both indicated that they consider integrity to be at the forefront of their operations. In a statement, Polymarket wrote that it shares the NFL’s commitment to preserving the integrity of the game, which is why it is “constantly enhancing” its market surveillance tools. Kalshi, meanwhile, asserted that it attempted to work constructively with the NFL to “collaborate on market integrity”.

“Contrary to the NFL’s statements, Kalshi is actively policing sports-related markets,” the company wrote. “We hope they change their position and start engaging to help the integrity of sports.”

While in Macau for an exhibition game, NBA Commissioner Adam Silver told CNBC that there are issues around integrity in prediction markets, as well as issues on capturing data. The NBA has a vested interest, he added, in gathering data when it detects “aberrational behaviour” on the markets. Unlike the NFL, which favours state regulation in sports wagering and predictions, Silver prefers a federal standard.

Maloney: ‘Throw away the key’

Market integrity also proved to be a hallmark at this week’s Predict 2026 conference in Midtown Manhattan, one of the first conferences dedicated to the burgeoning asset class. A panel on Tuesday featuring Coalition for Prediction Markets President Sean Patrick Maloney devoted considerable time to discussing methods for combating insider trading.

Maloney, a former New York Congressman, previously testified at a Senate hearing in May on sports wagering and predictions. His appearance at the event came nearly six months after the arrest of a US Army special forces soldier on insider trading charges. In April, federal prosecutors indicted Gannon Van Dyke on the theft of classified government information for personal financial gain.

According to the indictment, Van Dyke placed approximately $33,000 on Polymarket trades on whether Venezuela President Nicolas Maduro would be removed from office by a certain date. Van Dyke, who was privy to classified information on a raid by US special forces, has pleaded not guilty. Based on the timing of the trades, Van Dyke made approximately $400,000 on the transactions.

If convicted on all charges, Van Dyke could serve more than two decades in prison. Asked by iGB if a judge should impose a strict sentence if it is proven that Van Dyke leaked classified information to the public, Maloney concurred.

“You’re talking about misusing sensitive national security information,” he replied. “You can throw away the key.”

On another panel, Jack Murphy, senior counsel at Akin Gump Strauss, identified the Van Dyke matter as one of several insider trading cases that is being monitored closely by white-collar defense firms in the predictions space. He also pointed to cases involving a Google engineer, a former White House teleprompter operator and former New York Congressman George Santos as those which have garnered considerable headlines in recent months.

Seminole Tribe files suit against DraftKings

Over the last 12 months, a bevy of tribal gaming entities from California have led the charge against prediction markets in asserting that event contracts represent a profound affront to tribal sovereignty.

At the same time, the powerful Seminole Tribe of Florida has been conspicuously absent as the legal wrangling on the subject has escalated. Earlier this week, however, that changed when the tribe announced the filing of a high-profile lawsuit. On Thursday, the Seminoles filed a 72-page complaint against DraftKings in Broward County, Florida. The tribe also named DraftKings CEO Jason Robins personally in the suit.

In the lawsuit, the tribe alleged that DraftKings is conducting illegal sports betting in the state of Florida in violation of the Seminoles’ 2021 gaming compact. The tribe took particular exception with DraftKings’ “Super App”, a platform that combines multiple verticals into a single app, including the company’s predictions, sports wagering and online casino segments. According to the lawsuit, the app deprives Florida of “substantial revenue and regulatory oversight”, including mandatory consumer protections and restrictions on certain bets (e.g. collegiate prop wagers).

In response, DraftKings claimed that sports event contracts offered on its prediction platform operate in accordance with federal regulations set forth in the Commodity Exchange Act. While DraftKings stated that it holds “deep respect” for the Seminole Tribe, the company remains confident in its legal position regarding sports event contracts.

In other news, Kalshi announced deals with four tribes this week, including three in California: the Kletsel Dehe Wintun Nation, the Alturas Indian Rancheria and the Greenville Rancheria. The fourth, the Alabama-Quassarte Tribal Town, is located in Oklahoma.