Third Circuit stands alone as eighty cases rewrite Indian gaming law

Joe Webster counted eighty cases on Wednesday and said 85% have gone against prediction markets. That number — eighty — is the one that tells you where this fight actually is.

Webster was speaking to the Indian Gaming Association's New Normal webinar, and his arithmetic carries a precision that the prediction market industry's public posture tends to avoid. The Third Circuit ruled in Kalshi's favor in May, holding sports event contracts are swaps under exclusive CFTC jurisdiction. That ruling blocked New Jersey's cease-and-desist. It is also, as Webster noted carefully, the only federal appellate decision so far. One court. One ruling. And tribes have been winning in state courts at a rate that makes "regulatory uncertainty" sound like an understatement.

Webster expects New Jersey to petition the Supreme Court by September 3. Whether the Court takes that case or waits for a cleaner split is the open question, but Webster's view is that the Court will eventually have to move — and he thinks the Fourth, Sixth, and Ninth Circuits may hand it the circuit split it typically requires before it does. All three are fully briefed. A decision from any one of them could arrive before the NFL's opening week closes.

Here is where I part from the consensus reading of this litigation map. The industry has been framing the Third Circuit win as validation — proof that the CFTC preemption argument has legs. The reporting tends to follow that frame. I don't think that's where this lands when you look at the distribution of outcomes Webster described.

Eighty cases, with roughly sixty-eight going against prediction markets. That is not a preemption doctrine winning on the merits across jurisdictions. That is a preemption doctrine that won once, in one circuit, on a preliminary injunction standard, with a dissent that called the majority's swap classification unpersuasive on its face. Judge Roth's dissenting opinion — that these contracts are indistinguishable from traditional sports betting — is the argument that has been prevailing in state courts at a rate the industry has no good answer to.

The asymmetry matters beyond the scoreboard. Tribes are not litigating this as a revenue protection case alone. As Scott Crowell's presence on Wednesday's panel signals, Indian gaming compacts are the structural issue underneath the preemption fight. Tribal gaming agreements are built on exclusivity frameworks that CFTC jurisdiction, if it holds, would unwind without any state-level recourse. That gives the tribal plaintiffs a constitutional argument that goes beyond what a state attorney general can raise — and it gives the Supreme Court a reason to take the case that has nothing to do with sports betting's entertainment value.

The Kalshi player availability markets, landing now as NFL Week 1 approaches, add a layer the circuit courts will be examining in real time. Those contracts concentrate the information asymmetry that leagues and regulators have spent years trying to manage into a single binary question. The CFTC's own proposed rules flagged injury-adjacent markets as likely contrary to the public interest. Kalshi's availability construction is narrower than an injury market, but the tradable information is functionally the same: whether someone who knows a player's status before the public does can move a contract before the designation posts.

If a circuit court is looking for a fact pattern that crystallizes why the CFTC's preemption claim is contested territory, the availability market is it — a federally registered exchange offering a product that federal regulators have already said makes them uncomfortable, in a legal environment where eighty courts have mostly disagreed with the preemption argument.