Dems sweep may complicate SCOTUS composition, potential landmark decision on sports event contracts
More than two years before the historic PASPA decision, the sudden death of a storied Supreme Court chief justice profoundly altered the course of partisan battles on federal judicial appointments across the US.
The 2016 passing of former Supreme Court Chief Justice Antonin Scalia led to a bitter dispute in the nation’s capitol, as then Senate Majority Leader Mitch McConnell effectively blocked the nomination of Merrick Garland, an appellate judge selected by the White House to fill the void. Garland’s nomination stood dormant for 293 days, the longest in US history, paving the way for US President Donald Trump to appoint Neil Gorsuch the following January.
After Tuesday’s “Blue Sweep,” in both chambers of Congress, Senate Democrats appear reticent to wash the bitter taste of the Garland controversy. Oddly enough, the resumption of vicious political blood sport regarding potential replacements of two longtime justices could have lasting implications on the legality of sports event contracts in the US.
As major prediction market-traders placed the odds of a Democratic victory around 90% early on Election Night, Florida Governor Ron DeSantis crafted an ominous tweet on the social media platform X. In a post that received more than 3.1 million hits, DeSantis wrote that the odds of “confirming a worthy successor,” to Justices Samuel Alito and Clarence Thomas during the remainder of Trump’s presidency are virtually “zero.”
Appointed by former US President George H.W. Bush approximately a year before PASPA became effective in 1992, Thomas is the longest serving justice on the US high court. More than three decades later, a high-profile case on federal preemption regarding sports event contracts could be heard as early as next year. Given the stakes, potential gridlock on the appointment of a new justice could have a substantial impact on the pendency of the case.
A looming battle?
Years after Bush left office, his son George W. Bush appointed Alito in October 2005 to replace predecessor Sandra Day O’Connor. Alito, along with Thomas, have been lauded by Trump for siding with him on several major cases, most notably a decision on international tariffs.
Under Trump, prediction markets have taken off this year, with notional volume surpassing $185 billion over the third quarter. On the midterms, alone, operators handled activity of at least $1.4 billion, eclipsing volume from non-presidential elections in 2024 by a wide margin. Michael Selig, chairman of the US Commodity Futures Trading Commission, was nominated by Trump to lead the federal regulator on derivatives.
While Selig has faced intense criticism from state and tribal gaming regulators on states rights’ issues, he has continually reiterated that the CFTC has exclusive jurisdiction on the regulation of sports derivatives. Detractors of the options have also levied critiques against the CFTC on nepotism considering that the president’s son, Donald Trump Jr., serves on the boards of Kalshi and Polymarket. Selig has vehemently denied suggestions that outside business interests of the Trump family play any role in CFTC rulemaking as it relates to event contracts.
Since the nation continues to digest the tectonic shifts in Washington from the midterm results, the composition of the Court before the 2028 election is still far from certain. Under one scenario, the White House could apply pressure on the aforementioned justices to retire before the next presidential election. Based on that hypothetical, the possibility exists for Trump to nominate a new justice whose ideological leanings resemble those on the Conservative bloc. But as DeSantis notes, such an attempt could be met with considerable resistance by Congressional Democrats, leaving ambiguity for certain cases with a judicial split.
Low odds of granting cert before end of 2026
In an interview with iGB during Super Bowl Week, former New Jersey Governor Chris Christie indicated that he remained pleased with the composition of the Court on states’ rights issues. However, Christie made the comments months earlier in February when the race for Senate control appeared to be a dead heat.
On Polymarket’s offshore platform, one contract allows traders to transact on if the court will agree by the end of this year to hear the case. In legal parlance, the Supreme Court officially agrees to hear and review a lower-court decision when it grants a petition for a “writ of certiorari.” Typically, there is a higher likelihood that the Court will “grant cert,” when there is a circuit split between appellate courts on an issue with major significance. Regarding the legality of sports-event contracts, divergent rulings in recent months have created a split.
On Wednesday, the U.S. Court of Appeals for the Ninth Circuit denied Kalshi’s petition for rehearing on the legality of sports-event contracts, classified as “swaps.” The decision gives Kalshi a period of 90 days to seek review from the Supreme Court, according to gaming industry attorney Daniel Wallach.
Since Polymarket began listing the contract, odds on cert during the 2026 calendar year peaked at 82%. Traders appeared most confident in February in the weeks between the Super Bowl and March Madness. But on Wednesday the odds remained dramatically lower at just 21%. The odds have improved since Halloween when they hit a trough at 14%.
Within the last 24 hours, two Polymarket traders placed modest buy orders on the “No,” option. Neither trader staked more than $16 with the orders.