Developing Four Petitions Are at the Supreme Court and Kalshi's Name Is on None of Them

There are four certiorari petitions pending at the Supreme Court on whether states may apply their gambling laws to sports event contracts. Kalshi's name is on none of them.

That is not an accident of timing. New Jersey filed on September 2 and was docketed September 8 as No. 26-299. Robinhood Derivatives filed on September 9. Crypto.com's North American Derivatives Exchange filed on September 11. Kalshi, the company with the most at stake and the loudest public position that this fight needs a national answer, spent the same week doing the opposite: on September 9 it asked eleven judges of the Ninth Circuit to rehear the panel decision it lost on August 28.

Then, on September 18, it asked the Supreme Court for more time to respond to New Jersey. The Court granted it on September 22. Kalshi's brief in opposition is now due November 9 — five weeks later than the original October 8 date, and comfortably past the point where the petition could be considered early in the term.

Read the docket rather than the press releases and a different company appears. This one is not racing to Washington. It is managing the clock.

What the en banc petition actually buys

On the merits, rehearing en banc is close to hopeless. Gaming attorney Daniel Wallach put a number on it that deserves to be quoted every time a party files one: the Ninth Circuit granted 11 of 730 en banc petitions in fiscal 2025. That is 1.5 per cent. Nobody at Milbank thinks those are good odds.

The value is procedural. A pending petition for rehearing suspends issuance of the mandate. Until the mandate issues, the panel's judgment in KalshiEX LLC v. Assad does not formally take effect in the district courts below, and the states that have been waiting on it have to keep waiting.

You can watch that play out in Arizona this week. Attorney General Kris Mayes moved on Thursday to dissolve the injunction Judge Michael Liburdi entered in May, which has blocked her from prosecuting Kalshi under Arizona's gambling and election-betting statutes. Her office's argument is one sentence long and hard to answer: "Assad is now the law of this Circuit. The legal questions at issue in the instant case are the same, and the result must be the same."

The interesting filing is not Kalshi's. It is the CFTC's. The Commission asked the court to hold off on dissolving the injunction while Kalshi's rehearing request is pending, on the reasoning that acting now could force an unnecessary second round of appeals. A federal regulator is asking a federal court to preserve a private company's protection from state law enforcement pending a petition with a 1.5 per cent success rate. Whatever else that is, it is not neutral administration.

Two partners, two opposite asks

Robinhood took an equity stake in Crypto.com and the two announced a prediction-market partnership. They filed their petitions two days apart from the same Ninth Circuit loss. They are asking the Court for different things.

Crypto.com wants a ruling now: that the Commodity Exchange Act preempts state gaming law as applied to these contracts, full stop. Robinhood has urged the justices to hold the case until the CFTC finishes its rulemaking on sports event contracts.

Those positions cannot both be the industry's position. One says the statute already answers the question and the Court should say so. The other says the answer depends on what an agency does next, which is an odd thing to say about a preemption claim built on the text of a 1974 statute as amended in 2010.

Friday is what changes the calculus

The Sixth Circuit's opinion came down on September 25 — argued July 30, decided and filed Friday, Judge Julia Smith Gibbons writing for Clay and Bloomekatz. We covered the holding in yesterday's edition. What matters for the cert strategy is the shape of the disposition and one buried citation.

The panel affirmed the Southern District of Ohio's denial of a preliminary injunction and vacated the Middle District of Tennessee's grant of one, remanding both. Kalshi did not merely fail to win new ground in the Sixth Circuit. It lost protection it already had. Tennessee's regulators are no longer enjoined.

And the panel's alternative holding — that even assuming these contracts are swaps, the CEA neither expressly nor impliedly preempts state gambling law — is immune to the thing Robinhood wants to wait for. A CFTC rule can change what the Commission permits. It cannot make a court's reading of the exclusive-jurisdiction provision go away.

Then the citation. In explaining why sports outcomes lack the financial character a swap requires, Gibbons quoted the Commission itself: Kalshi's sports event contracts "generally lack any underlying cash market with bona fide economic transactions to provide directly correlated price-forming information." That language comes from the CFTC's 2024 Event Contracts proposal — the proposal the Commission withdrew on February 4, 2026, when Chairman Michael S. Selig said the accompanying staff advisory had "inadvertently created confusion and uncertainty for our market participants."

A withdrawn rulemaking is now published appellate authority against the company the agency is currently defending. That is the cost of a regulator changing its mind in public: the old position does not disappear, it gets cited.

The strongest case for what Kalshi is doing

Here is the honest version of the other side, and it is a real argument.

You do not take a case to the Supreme Court from a preliminary-injunction posture if you can avoid it. Every one of these appeals reviews a likelihood-of-success finding on an incomplete record under an abuse-of-discretion standard. The Court dislikes interlocutory vehicles, and a denial of certiorari now would be read across the country as a signal even though it formally means nothing. Worse, a loss on the merits in this posture is permanent in a way that a loss on a preliminary injunction is not. If you believe you are one clean record and one better circuit away from a stronger case, waiting is not cowardice. It is competence.

Add the agency point. The CFTC's June 10 proposal would amend Regulation 40.11 and add an Appendix F setting out how the Commission evaluates contracts touching the enumerated activities in Section 5c(c)(5)(C) — including gaming. If that rule lands the way the industry hopes, a chunk of the preemption argument gets easier and some of the state cases get harder to maintain. Robinhood's request that the Court wait is not frivolous.

We think it is wrong anyway, for two reasons.

The first is the alternative holding. Two circuits have now said that even if these are swaps, states keep their gambling laws. No agency rule reaches that, and each additional circuit that says it makes the eventual merits question harder for the industry rather than easier. Percolation is supposed to clarify a question. Here it is settling one — against the exchanges.

The second is that the clock is not free. Michigan got Robinhood to stop offering new sports event contracts on September 9, with existing positions closing October 9. An Iowa federal judge denied Kalshi a preliminary injunction the same day. The Tenth Circuit denied an emergency injunction in the Utah appeal. Tennessee's injunction is gone as of Friday. Every month of strategic patience is a month in which the map of states where the product legally operates gets smaller, and a company defending a shrinking footprint is a worse petitioner than one defending a national business.

What would prove us wrong

If the Ninth Circuit grants rehearing en banc, this column looks foolish and the 1.5 per cent was worth buying. If the CFTC finalises a rule this autumn that squarely authorises the broad-outcome contracts and a court treats it as changing the preemption analysis, Robinhood's patience was right and Crypto.com's urgency was noise. And if the Court calls for the views of the Solicitor General in No. 26-299, the whole timetable resets and November 9 stops mattering.

We do not know which way the Court leans, and anyone telling you they do is selling something. What the docket shows is narrower and checkable: the party that talks most about needing a national ruling has, in every filing it has made this month, chosen the option that delays one.

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Editor's note: TrueEdge builds odds and pricing tools and earns affiliate commissions from licensed sportsbooks. That is a commercial interest in how this fight resolves, and readers should weigh this piece accordingly. Our standing position — that criminalising federally licensed exchanges is bad policy even where we think the legal argument for preemption is losing — is argued here as commentary, not reported as fact.