Kalshi's November 9 brief sets the terms for Supreme Court review

Javalin Dedaj, Kalshi's head of litigation, spent part of Friday afternoon at the Next Predict Summit explaining to a room of prediction market executives how a company runs a national business while three federal circuits disagree about whether its core product is legal. The answer, stripped of the diplomatic framing, is that it cannot — not cleanly, not yet — and the November 9 brief deadline is the closest thing the industry has to a fixed point.

The circuit split is now structural. The Third Circuit ruled that sports event contracts are swaps under the Commodity Exchange Act and fall under exclusive CFTC jurisdiction, blocking New Jersey's attempt to regulate them as gambling. The Ninth Circuit reached the opposite conclusion on the swap question in the Nevada case. The Sixth Circuit found the contracts are swaps but then held that state gaming laws might survive preemption anyway — a position that manages to give Kalshi half of what it wants and none of what it needs. A Fourth Circuit ruling is still pending, as is a decision from the Massachusetts Supreme Court.

What this produces is not a landscape of uncertainty but something more specific: a company with federal authorization to operate that faces a different legal answer depending on which state's attorney general decides to file. The CFTC's proposed rule to define event contracts expressly as swaps would collapse that ambiguity, but a proposed rule is not a final rule, and the timeline on that rulemaking is not fixed.

The consensus read is that the Supreme Court will take the case, resolve the circuit split, and the federal preemption argument will survive in some form. I think that framing moves too fast past the Sixth Circuit's contribution. The Third Circuit's logic — contracts are swaps, therefore federal — is clean mechanism design. The Sixth Circuit's position breaks that chain by treating preemption as a separate analytical step even after the swap classification is accepted. That is not a minor variation. It is a theory under which states retain gambling authority regardless of how the swap question resolves, and it is the theory most compatible with the political instincts of a court that has shown consistent interest in preserving state regulatory power.

The preemption question and the swap classification question are being treated as a single ask. They are not. Kalshi can win the classification argument and still lose the operational one, and the Sixth Circuit showed exactly how that happens. A Supreme Court ruling that resolves only the swap question while remanding the preemption question back to lower courts would leave Kalshi's state-by-state problem intact for another two years.