---
type: claim
domain: internet-finance
description: The convergence of circuit court disagreements and unprecedented state coalition size creates conditions for Supreme Court review on an accelerated timeline
confidence: experimental
source: "Sportico / Holland & Knight / Courthouse News, April 2026 circuit litigation analysis"
created: 2026-04-11
title: Prediction market SCOTUS cert is likely by early 2027 because three-circuit litigation pattern creates formal split by summer 2026 and 34-state amicus participation signals federalism stakes justify review
agent: rio
scope: causal
sourcer: "Sportico / Holland & Knight"
related_claims: ["[[cftc-licensed-dcm-preemption-protects-centralized-prediction-markets-but-not-decentralized-governance-markets]]", "[[futarchy-based fundraising creates regulatory separation because there are no beneficial owners and investment decisions emerge from market forces not centralized control]]"]
supports: ["Third Circuit ruling creates first federal appellate precedent for CFTC preemption of state gambling laws making Supreme Court review near-certain"]
reweave_edges: ["Third Circuit ruling creates first federal appellate precedent for CFTC preemption of state gambling laws making Supreme Court review near-certain|supports|2026-04-20"]
related: ["prediction-market-scotus-cert-likely-by-early-2027-because-three-circuit-litigation-pattern-creates-formal-split-by-summer-2026-and-34-state-amicus-participation-signals-federalism-stakes-justify-review", "third-circuit-ruling-creates-first-federal-appellate-precedent-for-cftc-preemption-of-state-gambling-laws", "third-ninth-circuit-split-creates-scotus-pathway-for-prediction-market-preemption", "38-state-ag-coalition-signals-prediction-market-federalism-not-partisanship", "cftc-state-supreme-court-amicus-signals-multi-jurisdictional-defense-strategy", "ninth-circuit-sjc-simultaneous-skepticism-signals-state-authority-becoming-majority-judicial-view", "ninth-circuit-oral-argument-signals-pro-state-ruling-creating-circuit-split-with-third-circuit"]
---

# Prediction market SCOTUS cert is likely by early 2027 because three-circuit litigation pattern creates formal split by summer 2026 and 34-state amicus participation signals federalism stakes justify review

The April 6, 2026 Third Circuit ruling in *Kalshi v. Flaherty* created the first appellate-level support for CEA preemption of state gambling law. The 9th Circuit (oral argument April 16, 2026, ruling expected summer 2026) and 4th Circuit (oral arguments May 7, 2026) are actively litigating the same question with district courts having ruled against Kalshi in both jurisdictions. If the 9th Circuit disagrees with the 3rd Circuit, a formal circuit split emerges by late 2026. The 6th Circuit already shows an intra-circuit split between Tennessee and Ohio district courts. This three-circuit litigation pattern, combined with 34+ states plus DC filing amicus briefs supporting New Jersey against Kalshi, signals to SCOTUS that federalism stakes justify review even without waiting for full circuit crystallization. Prediction market traders assign 64% probability to SCOTUS accepting a sports event contract case by end of 2026. The NJ cert petition would be due approximately early July 2026, with SCOTUS cert possible by December 2026 and October 2027 term likely. The tribal gaming interests' argument that the June 2025 SCOTUS ruling in *FCC v. Consumers' Research* undermines CFTC's self-certification authority provides a separate doctrinal hook for cert beyond the circuit split.

## Supporting Evidence

**Source:** 3rd Circuit ruling, April 7, 2026; CNBC reporting

The 3rd Circuit ruled 2-1 in favor of Kalshi on April 7, 2026, with the 9th Circuit Nevada decision expected 'in weeks.' This timing creates the predicted circuit split by summer 2026. The 3rd Circuit adopted 'DCM trading field preemption' while the 9th Circuit is expected to use narrower conflict/contract-specific analysis, creating an analytically deep split (different frameworks, not just outcomes).


## Extending Evidence

**Source:** BettorsInsider, Selig testimony timing relative to 9th Circuit arguments

Selig's testimony occurred the same day as 9th Circuit oral arguments (April 16, 2026), indicating the CFTC is managing simultaneous congressional and judicial pressure. The ANPRM comment deadline of April 30 creates a procedural buffer that allows the agency to defer substantive answers until after the litigation advances, suggesting the CFTC is coordinating its rulemaking timeline with the litigation calendar.


## Supporting Evidence

**Source:** The Nevada Independent, April 20, 2026

The 9th Circuit's backing of Nevada creates the second circuit to rule on CFTC preemption of state gaming laws, with the 3rd Circuit ruling for Kalshi and the 9th Circuit backing Nevada. This explicit circuit split on the same legal question (whether CEA preempts state gaming enforcement against prediction market contracts) strengthens the case for SCOTUS review. Gaming regulators in more than 20 states have filed similar legal challenges, indicating the breadth of the jurisdictional conflict.


## Supporting Evidence

**Source:** Bloomberg Law, April 17, 2026

Bloomberg Law reports April 16, 2026 Ninth Circuit oral arguments showed all three Trump-appointed judges (Nelson, Bade, Lee) displaying marked skepticism toward prediction markets and CFTC preemption arguments. Judge Nelson focused on Rule 40.11's prohibition of gaming contracts on DCMs unless CFTC grants exceptions. Legal observers at the argument consensus: panel appears likely to rule for Nevada. Combined with Third Circuit's April 6 ruling for Kalshi (2-1 for federal preemption), a Ninth Circuit ruling for Nevada creates confirmed circuit split. Fortune (April 20) describes case as 'hurtling toward the Supreme Court.' Total prediction market trading volume exceeded $6.5 billion in first two weeks of April 2026, with Masters golf market alone reaching $460M.


## Extending Evidence

**Source:** ProphetX CFTC ANPRM comments, April 2026

ProphetX's Section 4(c) proposal represents a regulatory hedge against adverse SCOTUS ruling. If the Court rejects field preemption, Section 4(c) provides an alternative authorization pathway that doesn't depend on the preemption doctrine. This suggests sophisticated operators are preparing for multiple legal outcomes.


## Supporting Evidence

**Source:** casino.org, April 20, 2026; Ninth Circuit oral arguments April 16, 2026

Ninth Circuit oral arguments held April 16, 2026 with ruling expected 'in the coming days' per casino.org April 20 article. Judge Nelson's exact language on Rule 40.11: '40.11 says any regulated entity shall not list for trading gaming contracts. It prohibits it from going on. The only way to get around it is if you get permission first.' Panel composition (Nelson, Bade, Lee - all Trump first-term appointees) showed marked skepticism despite being 'friendly' circuit. Multiple states (e.g., Arizona) have filed to delay their own cases pending this ruling, confirming its dispositive significance. Timeline compressed from typical 60-120 day window to imminent ruling.


## Extending Evidence

**Source:** casino.org, April 20, 2026, oral argument coverage

Ninth Circuit oral arguments on April 16, 2026 showed all three judges (Nelson, Bade, Lee) expressing skepticism toward CFTC preemption. Judge Nelson directly challenged CFTC's position on Rule 40.11, stating: '40.11 says any regulated entity shall not list for trading gaming contracts. It prohibits it from going on. The only way to get around it is if you get permission first.' When CFTC attorney argued sports contracts aren't 'involving gaming,' Nelson replied: 'You go to a casino to make sports bets.' The article published April 20 stated ruling expected 'in the coming days' rather than typical 60-120 day window, suggesting imminent circuit split confirmation with Third Circuit's pro-preemption stance.


## Supporting Evidence

**Source:** casino.org, April 20, 2026

Ninth Circuit oral arguments held April 16, 2026 with ruling expected 'in the coming days' per casino.org April 20 article. Judge Nelson's exact language on Rule 40.11: '40.11 says any regulated entity shall not list for trading gaming contracts. It prohibits it from going on. The only way to get around it is if you get permission first.' Panel composition (Nelson, Bade, Lee - all Trump first-term appointees) showed marked skepticism despite being 'friendly' circuit. Multiple states (e.g., Arizona) have filed to delay their own cases pending this ruling, confirming its dispositive significance. Timeline compressed from typical 60-120 day window to potentially days, accelerating circuit split formation.


## Supporting Evidence

**Source:** Bloomberg Law, April 17, 2026

Bloomberg Law reports April 16, 2026 Ninth Circuit oral arguments showed all three Trump-appointed judges (Nelson, Bade, Lee) expressing marked skepticism toward prediction markets and CFTC preemption arguments. Judge Nelson focused on Rule 40.11's prohibition of gaming contracts on DCMs unless CFTC grants exceptions. Legal observers at the argument consensus: panel appears likely to rule for Nevada. Combined with 3rd Circuit's April 6 ruling for Kalshi (2-1, preliminary injunction for federal preemption), a 9th Circuit ruling for Nevada creates confirmed circuit split. Fortune (April 20) describes case as 'hurtling toward the Supreme Court.'


## Supporting Evidence

**Source:** casino.org, April 20, 2026; Ninth Circuit oral arguments April 16, 2026

Ninth Circuit oral arguments on April 16, 2026 showed marked skepticism from all three judges (Nelson, Bade, Lee) toward Kalshi's federal preemption argument. Judge Nelson directly challenged CFTC's position on Rule 40.11, stating: '40.11 says any regulated entity shall not list for trading gaming contracts. It prohibits it from going on. The only way to get around it is if you get permission first.' Casino.org article published April 20 described ruling as expected 'in the coming days' rather than typical 60-120 day window, suggesting imminent circuit split confirmation. Multiple states (including Arizona) have filed to delay their own cases pending this ruling, confirming its dispositive significance.


## Supporting Evidence

**Source:** Bloomberg Law, April 17, 2026

Bloomberg Law reports April 16, 2026 Ninth Circuit oral arguments showed all three Trump-appointed judges (Nelson, Bade, Lee) expressing marked skepticism toward prediction markets and CFTC preemption arguments. Judge Nelson focused on Rule 40.11's prohibition of gaming contracts on DCMs unless CFTC grants exceptions. Legal observers at the argument consensus: panel appears likely to rule for Nevada. Combined with Third Circuit's April 6 ruling for Kalshi, this creates the predicted circuit split. Fortune (April 20) describes the case as 'hurtling toward the Supreme Court.'


## Supporting Evidence

**Source:** casino.org, April 20, 2026; Ninth Circuit oral arguments April 16, 2026

Ninth Circuit oral arguments on April 16, 2026 showed marked skepticism from all three Trump-appointed judges (Nelson, Bade, Lee) toward Kalshi's federal preemption argument. Judge Nelson's direct questioning of CFTC Rule 40.11 ('40.11 says any regulated entity shall not list for trading gaming contracts. It prohibits it from going on. The only way to get around it is if you get permission first.') signals likely ruling for Nevada. Article published April 20 stated ruling expected 'in the coming days' rather than typical 60-120 day window, suggesting imminent circuit split confirmation with Third Circuit. Multiple states (including Arizona) have already filed to delay their own cases pending this ruling, confirming its dispositive significance.


## Supporting Evidence

**Source:** National Law Review, April 21, 2026

9th Circuit ruling expected mid-June to mid-August 2026 (60-120 days from April 16 oral arguments). Panel of all Trump-appointed judges appeared to lean Nevada's way during oral arguments. If 9th Circuit rules against Kalshi, creates explicit circuit split with 3rd Circuit's April 7 ruling, making SCOTUS cert 'near-certain' according to legal analysts. Timeline: 9th Circuit ruling summer 2026 → cert petition fall 2026 → SCOTUS arguments spring 2027 at earliest.


## Supporting Evidence

**Source:** Nevada Current, Bloomberg Law, Fortune, April 2026

9th Circuit panel leaned against Kalshi at April 16, 2026 oral arguments, with ruling expected June-August 2026. If 9th Circuit rules against Kalshi, it creates explicit 3rd vs. 9th Circuit split. Polymarket assigns 64% probability SCOTUS accepts a sports event contract case by end of 2026. Industry lawyers describe SCOTUS outcome as 'true jump ball.'


## Extending Evidence

**Source:** NY AG press release, April 24 2026

The Massachusetts Supreme Judicial Court case now has 38 state AGs filing amicus (April 24, 2026), creating a state supreme court pathway to SCOTUS review that runs parallel to the circuit court split track. This means SCOTUS could grant cert through either (1) circuit split between 3rd and 9th Circuits on federal preemption, or (2) state supreme court ruling on federalism grounds with 38-state political backing. The dual-track structure increases cert likelihood and accelerates timeline.


## Extending Evidence

**Source:** Multi-state litigation timeline, April 23-25, 2026

The 38-state AG coalition (up from 34 in prior tracking) filed in Massachusetts SJC on April 24, 2026, one day after CFTC sued four states and one day before Wisconsin filed its own lawsuit. This compressed 72-hour escalation represents the densest regulatory development in the tracking series and strengthens the federalism stakes that make SCOTUS cert likely.


## Extending Evidence

**Source:** Bettors Insider, 2026-04-28

Massachusetts SJC case (Commonwealth v. KalshiEx, No. SJC-13906) is fully briefed as of April 28, 2026 with competing federal/state amicus briefs filed April 24. Case represents state supreme court deciding whether its own AG's enforcement is preempted—structurally different from federal district courts where CFTC files offensive cases. Some observers estimate resolution not until 2028, suggesting extended timeline before SCOTUS cert becomes viable.


## Extending Evidence

**Source:** CoinDesk Policy, April 28, 2026

CFTC's 5-state campaign (April 2-28, 2026) now spans multiple circuits: Arizona (9th Circuit), Connecticut (2nd Circuit), Illinois (7th Circuit), New York (2nd Circuit), Wisconsin (7th Circuit). Same-day response timing (Wisconsin April 28) indicates CFTC is accelerating toward circuit split resolution. 26-day campaign timeline compresses what would normally take months into weeks, suggesting CFTC is deliberately forcing rapid appellate review to reach SCOTUS faster.


## Supporting Evidence

**Source:** CoinDesk Policy / The Hill, CFTC 5-state campaign April 2-28, 2026

The CFTC's 5-state litigation campaign (April 2-28, 2026) across multiple circuits (AZ 9th Circuit, CT 2nd Circuit, IL 7th Circuit, NY 2nd Circuit, WI 7th Circuit) is accelerating toward circuit split. The 38-state AG coalition opposing CFTC preemption combined with this multi-circuit litigation pattern strengthens the case for SCOTUS cert by early 2027.


## Extending Evidence

**Source:** Bettors Insider, May 1, 2026

Massachusetts SJC oral argument scheduled for May 4, 2026 converts the case from 'pending indefinitely' to 'ruling likely by August-November 2026' (3-6 months post-argument). This accelerates the timeline for state supreme court precedent and increases pressure for SCOTUS review if the SJC rules against CFTC preemption, as it would create the first binding state supreme court precedent in this litigation wave.


## Supporting Evidence

**Source:** Fortune/Sportico/iGaming Business/Covers.com, April-May 2026

Multiple sources (Fortune, Sportico, iGaming Business, Covers.com) converge on SCOTUS cert decision timeline of November-December 2026, with ruling in 2027. Third Circuit ruled April 6, 2026 for CFTC preemption; Ninth Circuit oral argument showed cold reception to CFTC arguments with ruling expected May-June 2026. Massachusetts SJC oral argument May 4 structures against federal preemption. Polymarket market at 39% probability for SCOTUS accepting case by Dec 31, 2026 with $936,637 in volume as of April 21. Analyst consensus cites: (1) billion-dollar economic implications, (2) irreconcilable circuit split (Third vs. Ninth), (3) classic federal-state conflict SCOTUS traditionally resolves, (4) strong Congressional and state interest on both sides.


## Supporting Evidence

**Source:** InGame, April 16 2026 Ninth Circuit oral argument

Ninth Circuit oral argument on April 16 (10 days after Third Circuit's April 6 pro-preemption ruling) showed judicial hostility to federal preemption arguments, with a judge stating 'This can't be a serious argument.' Ruling expected June 14 – August 14, 2026, which aligns with the predicted summer 2026 circuit split timeline.


## Extending Evidence

**Source:** BettorsInsider / Norton Rose Fulbright / Holland & Knight circuit-by-circuit analysis, May 5, 2026

SCOTUS cert probability updated to 64% by year-end 2026 (up from 39% in prior tracking). Circuit split now has four dimensions: Third Circuit ruled pro-CFTC preemption (April 6, 2026); Ninth Circuit signaled pro-state at oral argument (April 16); Fourth Circuit oral argument scheduled May 7, 2026 following Maryland district court pro-state ruling; Sixth Circuit has intra-circuit split with Tennessee Middle District ruling for Kalshi and Ohio Northern District ruling against Kalshi. Massachusetts SJC signaled pro-state at May 4 oral argument. The split is now embedded within circuits (Sixth Circuit) not just between circuits, which may accelerate SCOTUS petition.


## Supporting Evidence

**Source:** Arizona Capitol Times / 38 State AGs, 2026-04-27

The 38-state AG coalition filing (April 27, 2026) confirms the political stakes for SCOTUS review. The coalition represents nearly 75% of states asserting regulatory authority through federalism arguments. If states lose the Fourth/Ninth Circuit battles, the breadth of this coalition signals they will pursue Supreme Court review. The amicus brief was filed in both the SJC case and referenced in Fourth Circuit proceedings, demonstrating coordinated multi-jurisdictional strategy.


## Supporting Evidence

**Source:** CoinDesk April 24 2026 analysis

CFTC's offensive litigation strategy against five states simultaneously, combined with existing Third Circuit precedent and pending Ninth Circuit cases, accelerates the federal-state confrontation timeline. The direct federal government vs. state government litigation structure (rather than private party disputes) increases SCOTUS cert probability beyond current 64% market estimates.


## Supporting Evidence

**Source:** Bettors Insider circuit split synthesis, April-May 2026

As of May 7, 2026, the circuit split has materialized with concrete timeline: Third Circuit ruled 2-1 pro-Kalshi (April 6), Ninth Circuit oral argument showed strong skepticism with all three Trump-appointed judges questioning swap classification and preemption (April 16), Fourth Circuit oral argument occurred May 7 with expected pro-state ruling by July-September 2026, and Sixth Circuit has intra-circuit split with ruling expected September-October 2026. Polymarket probability of SCOTUS cert acceptance by year-end 2026 is 64%. The multi-circuit split is now moving decisively toward 2-1 or 3-1 pro-state, making SCOTUS cert near-certain by mid-2027.


## Supporting Evidence

**Source:** Ninth Circuit oral argument, April 16, 2026

The Ninth Circuit panel's strong skepticism, combined with the Massachusetts SJC oral argument on May 7, creates a likely 2-1 circuit split (Ninth and Fourth pro-state, Third pro-CFTC) by summer 2026, making SCOTUS cert essentially forced. The expected ruling timeline of 60-120 days from April 16 places the Ninth Circuit decision in June-August 2026.


## Supporting Evidence

**Source:** Law.com / National Law Journal, Fourth Circuit oral argument coverage, May 7, 2026

Judge Gregory stated during oral argument that 'this will probably end up with the Supreme Court,' providing direct judicial acknowledgment that the Fourth Circuit panel views this as a circuit-split-bound issue requiring ultimate resolution by SCOTUS.


## Extending Evidence

**Source:** InGame Fourth Circuit coverage, Judge Gregory SCOTUS prediction

Fourth Circuit panel's openness to field preemption creates uncertainty about circuit split dynamics. If Fourth Circuit rules pro-Kalshi (field preemption), it creates 2-0 circuit record (Third + Fourth) rather than a split, which changes SCOTUS cert calculus. Judge Gregory's prediction that 'this will probably end up with the Supreme Court' suggests the panel recognizes the case's significance regardless of outcome. InGame analysis suggested 'likely reversal or partial reversal' — a significant update from pre-argument pro-state expectations.


## Supporting Evidence

**Source:** Fortune 2026-04-20

Fortune analysis confirms SCOTUS cert is 'almost certain' given emerging circuit split (Third Circuit pro-Kalshi, Ninth Circuit appears skeptical, Fourth Circuit pending) and the constitutional importance of the preemption question. Observers expect congressional action regardless of court outcome.


## Supporting Evidence

**Source:** DefiRate Fourth Circuit oral argument analysis, May 8, 2026

Fourth Circuit panel skepticism creates high probability of anti-Kalshi ruling, which would create 2-1 circuit split (Fourth and Ninth against Kalshi, Third Circuit pro-Kalshi). DefiRate characterizes panel as expressing 'significant doubts' about Kalshi's position. Decision expected July-September 2026. If Fourth Circuit rules against Kalshi, SCOTUS cert becomes 'near-certain' according to source analysis.
