Democratic midterm sweep may complicate Supreme Court path for sports event contracts case
After Democrats won both chambers of Congress, uncertainty over future Supreme Court appointments could affect a possible federal preemption case on sports event contracts. Polymarket odds of the court taking the case in 2026 stand at 21%.
GamblingSource: iGaming Business
The outcome of the US midterm elections could shape the timing and handling of a potentially landmark Supreme Court case on the legality of sports event contracts, according to iGaming Business.
Democrats took both chambers of Congress on Tuesday, and the article points to the long fight over the Merrick Garland nomination in 2016 as a reminder of how contentious judicial appointments can become. On election night, Florida Governor Ron DeSantis wrote on X that the chances of confirming a worthy successor to Justices Samuel Alito and Clarence Thomas during the rest of Donald Trump's presidency were virtually zero. The post drew more than 3.1 million views. Thomas is the longest-serving justice on the court. One scenario sketched in the report is that the White House could press the two justices to retire before the next presidential election, though a nominee could meet strong resistance from Congressional Democrats.
The backdrop is rapid growth in prediction markets this year. Notional volume passed $185 billion in the third quarter, and operators handled at least $1.4 billion in activity on the midterms alone. CFTC chairman Michael Selig, a Trump nominee, has been criticised by state and tribal gaming regulators over states' rights, but he maintains that the agency has exclusive jurisdiction over sports derivatives. Critics have also raised concerns about Donald Trump Jr. serving on the boards of Kalshi and Polymarket, and Selig has denied that the family's business interests influence CFTC rulemaking on event contracts.
On the legal front, the Ninth Circuit on Wednesday denied Kalshi's petition for rehearing on sports event contracts, which are classified as swaps. According to attorney Daniel Wallach, this gives Kalshi 90 days to seek Supreme Court review. Divergent appellate rulings in recent months have created a circuit split, which typically raises the likelihood that the court grants a writ of certiorari.
A contract on Polymarket's offshore platform lets traders wager on whether the court will agree to hear the case by the end of 2026. Odds peaked at 82% in February and stood at 21% on Wednesday, up from a low of 14% around Halloween. Two traders placed small buy orders on the No option within the previous 24 hours, neither staking more than $16.
Based on reporting by iGaming Business.