---
type: source
title: "Kalshi Third Circuit Win Is Preliminary Injunction, Not Merits — SCOTUS Timeline and 34-State Coalition"
author: "Sportico / Holland & Knight / Courthouse News"
url: https://www.sportico.com/law/analysis/2026/kalshi-third-circuit-new-jersey-scotus-1234889561/
date: 2026-04-07
domain: internet-finance
secondary_domains: []
format: article
status: unprocessed
priority: high
tags: [kalshi, scotus, third-circuit, prediction-markets, cftc, preemption, regulation]
---

## Content

The April 6, 2026 Third Circuit ruling in *Kalshi v. Flaherty*, Case No. 25-1922, was a **preliminary injunction**, not a full merits decision. The 2-1 majority applied the "reasonable likelihood of success" standard, not the final merits standard. Trial court merits proceedings continue.

**Circuit litigation landscape:**
- **3rd Circuit (April 6):** FOR Kalshi — CEA preempts state gambling law (preliminary injunction)
- **9th Circuit:** Oral argument April 16, 2026 (Kalshi, Robinhood, Crypto.com). District court sided with Nevada. Expected ruling 60-120 days post-argument (summer 2026).
- **4th Circuit:** Maryland oral arguments May 7, 2026. District court ruled for Maryland (against Kalshi).
- **6th Circuit:** Intra-circuit split between Tennessee and Ohio district courts.

**SCOTUS timeline:**
- If 9th Circuit disagrees with 3rd Circuit → formal split by late 2026
- NJ cert petition due approximately early July 2026 (or later if en banc petition first)
- SCOTUS cert possible by December 2026; October 2027 term likely
- Prediction market traders: 64% probability SCOTUS accepts a sports event contract case by end of 2026

**Coalition:** 34+ states plus DC filed amicus briefs supporting New Jersey against Kalshi in the 3rd Circuit — a massive state coalition for federalism concerns.

**Novel doctrinal hook:** Tribal gaming interests argued that the June 2025 SCOTUS ruling (*FCC v. Consumers' Research*) undermines CFTC's self-certification authority, providing a separate hook for cert beyond the circuit split.

**NJ position:** AG "evaluating all options" and "coordinating with other states." May strategically wait for full merits ruling rather than petitioning on the injunction.

## Agent Notes

**Why this matters:** The preliminary injunction vs. merits distinction materially changes the doctrinal weight of the 3rd Circuit ruling. Previous sessions (16, 17) treated this as a more conclusive appellate win than it actually is. The merits case continues at the trial level.

**What surprised me:** (1) 34+ states filed amicus — much larger than expected. This coalition size signals to SCOTUS that the federalism stakes justify review even without waiting for full circuit crystallization. (2) The tribal gaming *FCC v. Consumers' Research* angle is a novel doctrinal hook that had not appeared in any previous session's research.

**What I expected but didn't find:** A formal NJ cert petition announcement. The AG's "evaluating options" language suggests they're being strategic rather than rushing to petition on an injunction.

**KB connections:**
- `cftc-licensed-dcm-preemption-protects-centralized-prediction-markets-but-not-decentralized-governance-markets` — needs scope qualifier: the protection is from preliminary injunction, not merits ruling; merits still litigated
- `cftc-multi-state-litigation-represents-qualitative-shift-from-regulatory-drafting-to-active-jurisdictional-defense` — 34-state amicus coalition now confirms the state-side resistance is at least as organized as federal offense

**Extraction hints:**
- CLAIM: "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"
- Scope qualifier to add to existing `cftc-licensed-dcm-preemption` claim: 3rd Circuit win is preliminary injunction (reasonable likelihood of success standard), not final merits determination

## Curator Notes

PRIMARY CONNECTION: `cftc-licensed-dcm-preemption-protects-centralized-prediction-markets-but-not-decentralized-governance-markets`
WHY ARCHIVED: Adds the preliminary injunction scope caveat to the 3rd Circuit ruling and provides the full SCOTUS timeline projection with coalition evidence
EXTRACTION HINT: Two distinct claims: (1) preliminary injunction vs. merits scope qualifier, (2) SCOTUS cert probability/timeline based on three-circuit litigation pattern