vizmaya desk · 14 October 2026
Is a bet on a football game really a bet?
The fight over prediction markets in the United States, explained from the very beginning.
Tap the right side to start
Start here
A prediction market sells yes-or-no tickets.
Someone asks a question about the future. A ticket pays $1 if the answer turns out to be yes, and nothing if it is no.
The price of the ticket is the crowd's guess. A 70-cent ticket says: roughly 70 chances in 100.
Sources: KuCoin News on the CFTC proposal; DefiLlama
Why the name matters
The same ticket can have two names.
Call it a financial contract, and one federal agency writes the rules. It is the CFTC, the Commodity Futures Trading Commission. It watches markets where people trade contracts about the future.
Call it a bet, and each state writes its own rules.
Sources: Bloomberg, 9 Oct 2026; PYMNTS, 1 Oct 2026
The one word
Everything turns on one word: swap.
A 2010 law gave the CFTC sole power over contracts called swaps. A swap includes a deal that pays out depending on "the occurrence, nonoccurrence, or the extent of the occurrence of an event."
Kalshi, the biggest US prediction market, says a game result is such an event. States say it is just a bet with a new label.
Sources: Bloomberg Law; The Defiant; Katten via Mondaq
Who is in the market
One company handles most of the trading.
82%
In August 2026 the three biggest venues traded $45.33 billion. Kalshi handled $37.17 billion of it. That is about $82 of every $100.
"Trading" means the total dollar value of tickets bought and sold.
Sources: The Block, 2 Sep 2026; The Defiant (near 83%)
What they trade
Most of Kalshi's trading is sports.
87%
In March 2026, sports made up 87% of everything traded on Kalshi.
So the sports question is not a side issue. It is most of the business.
Sources: PM.wiki, March 2026; Cleatz
Two courts, two answers
Two courts looked at the same contracts and disagreed.
In April 2026 the Third Circuit appeals court, which covers New Jersey, said Kalshi's sports contracts are swaps. So federal law wins.
On 28 August the Ninth Circuit, which covers Nevada, called them "sports gambling, regardless of whether Kalshi calls them swaps."
Sources: Proskauer; The Defiant; Benzinga
The tie-breaker
When appeals courts disagree, the Supreme Court breaks the tie.
The country is split into regions. Each has its own appeals court. The Supreme Court sits above all of them.
So far the Third Circuit sides with Kalshi. The Sixth and Ninth do not. The Fourth has not ruled. In September, New Jersey asked the Supreme Court to step in.
Sources: SBC Americas, 9 Oct 2026; DeFi Rate; Front Office Sports
A new voice
On 8 October, the NFL sided with the states.
The league asked the Supreme Court to take New Jersey's case. It says the CFTC and exchanges like Kalshi have refused safeguards it asked for, such as a minimum age of 21.
That is the NFL's account. It says it does not want prediction markets to disappear. The Court has not yet taken the case.
Sources: Bloomberg Law; Decrypt; SBC Americas
The regulator replies
On 9 October, the CFTC tried to draw the line itself.
It proposed a rule saying event contracts on sports, politics, culture and weather count as swaps. A second rule says casino-style bets, like sportsbook wagers, do not.
Its chairman, Michael Selig, said "casino-style gambling products are not derivatives."
Sources: CFTC release 9310-26; Decrypt; Unchained
Not yet a verdict
A proposed rule is a draft, not the final word.
The public gets 30 days to comment. The clock starts when the rule is printed in the Federal Register, the government's daily record of new rules.
Our reading
Even a final rule does not tell judges what a law means. Courts still decide that.
Source: CFTC release 9310-26; Unchained
Where it could break
One word holds up the whole market.
Follow the chain. About $45 billion traded in one month. Most of it through one company. Most of that company's trading is sports.
And all of that rests on one question: is a sports contract a swap? If courts keep saying no, more states can apply their own rules to the biggest part of the business.
Figures from the earlier slides. The funnel is an illustration, not drawn to scale.
The other side
Why this may not break the market.
Early days
Both appeals rulings came before a final verdict. The Ninth Circuit also sent Kalshi's election contracts back to a lower court.
One state at a time
Nevada can enforce its rules now. In New Jersey, the same contracts stay shielded.
A federal backer
The CFTC says it alone has authority, and has now proposed rules to say so.
Sources: Proskauer; The Defiant; CFTC
What happens next
Three things will decide where this goes.
The Supreme Court
Will it take the case? New Jersey and the NFL want it to. Reports differ on when it will decide.
The comment window
Comments on each CFTC rule are due 30 days after it is printed in the Federal Register.
The Fourth Circuit
Another appeals court has not ruled yet. Its answer could widen the split or narrow it.
Sources: SBC Americas; Forklog; CFTC
Sources and method
Where the facts come from.
- CFTC: release 9310-26, 9 Oct 2026
- Decrypt: CFTC draws the line
- Unchained: the swap proposal
- Bloomberg Law: NFL asks Supreme Court
- Decrypt: the NFL brief
- SBC Americas: NFL, states, New Jersey
- Proskauer: the Ninth Circuit ruling
- The Defiant: Ninth splits with Third
- Benzinga: the Third Circuit ruling
- DeFi Rate: Ninth Circuit ruling
- Front Office Sports: New Jersey petition
- The Block: August volume
- The Defiant: Kalshi's widening lead
- PM.wiki: March 2026 volume
- Cleatz: prediction market revenue
Method We use only figures that two independent sources, or one official document, back up. Monthly volume numbers differ between trackers, so treat them as close, not exact. Not confirmed When the Supreme Court will decide, and the exact comment deadlines. We read news and law-firm summaries, not the court opinions themselves.
vizmaya desk · 14 October 2026