---
type: source
title: "Kalshi's Prediction Markets Sports Betting Fight Moves Toward the Supreme Court"
author: "Fortune"
url: https://fortune.com/2026/04/20/kalshi-supreme-court-sports-betting-prediction-markets/
date: 2026-04-20
domain: internet-finance
secondary_domains: []
format: article
status: processed
processed_by: rio
processed_date: 2026-04-20
priority: high
tags: [kalshi, supreme-court, 9th-circuit, 3rd-circuit, circuit-split, prediction-markets, preemption]
extraction_model: "anthropic/claude-sonnet-4.5"
---

## Content

The 9th Circuit heard oral arguments April 16 in consolidated cases (Kalshi, Crypto.com's NADEX, Robinhood Derivatives vs. Nevada). The 3rd Circuit ruled 2-1 for Kalshi in April (blocking New Jersey). A 9th Circuit ruling is expected "within weeks." If the 9th Circuit rules against Kalshi, it creates the exact circuit split conditions that trigger SCOTUS review — two federal appellate courts reaching opposite conclusions on CEA preemption of state gaming law. Gaming lawyers quoted say a SCOTUS case is likely "by next year." The Trump administration backed Kalshi via CFTC amicus brief in the 9th Circuit. SCOTUS justices potentially sympathetic to states' rights present complications for Kalshi's federal preemption defense.

## Agent Notes

**Why this matters:** SCOTUS review in 2027 is now the baseline scenario, not a tail risk. This is the definitive resolution timeline for whether federal preemption protects prediction markets from state gaming law. Until then, legal uncertainty is structural — not something the ANPRM or proposed rulemaking can resolve.

**What surprised me:** The Fortune article is dated April 20, suggesting the 9th Circuit has NOT yet issued the final merits ruling on preemption — it's still pending. This means the Nevada Independent article I archived separately is about a DIFFERENT ruling (a stay or procedural ruling), not the final preemption merits. Two distinct legal proceedings are happening in parallel.

**What I expected but didn't find:** Detailed discussion of whether CFTC's Rule 40.11 issue (gaming contracts prohibited on DCMs) was addressed by Selig or CFTC in their amicus brief.

**KB connections:** Relates to "futarchy-governed entities are structurally not securities because prediction market participation replaces concentrated promoter effort" — though that's a securities law argument, this is CEA preemption. The SCOTUS trajectory means CFTC regulatory clarity is 2027+ for on-chain futarchy platforms.

**Extraction hints:** New claim candidate: "The 3rd-9th Circuit split over CEA preemption of state gaming laws pushes final resolution to SCOTUS review, likely in 2027, meaning prediction market regulatory defensibility remains legally uncertain through at least 2028." This would update/extend existing Belief #6 claims.

**Context:** Prediction market industry now faces simultaneous legal battles in 20+ states, a circuit split, CFTC suing three states directly, and a congressional hearing. The regulatory front is extremely active.

## Curator Notes

PRIMARY CONNECTION: "futarchy-based fundraising creates regulatory separation because there are no beneficial owners and investment decisions emerge from market forces not centralized control"
WHY ARCHIVED: Documents the SCOTUS timeline for prediction market preemption resolution — key for assessing Belief #6 durability
EXTRACTION HINT: The two-front nature (9th Circuit merits pending + CFTC state lawsuits) is the key structural insight; extract these as distinct legal tracks with different resolution timelines
