US appeals court rules against Kalshi, says states can regulate prediction markets
The unanimous panel said Kalshi’s sports contracts are not swaps and that federal law does not block state gambling rules, deepening the appeals-court split.
- The Sixth Circuit Court of Appeals ruled Friday that Ohio and Tennessee can regulate Kalshi's sports-related event contracts under state gambling laws, rejecting the platform's claim of exclusive Commodity Futures Trading Commission jurisdiction.
- Kalshi and other prediction market platforms argue their products are financial derivatives called 'swaps' regulated federally, while States contend these offerings amount to gambling subject to local sports betting laws.
- "We hold that Kalshi has not shown that its sports-event contracts satisfy the statutory definition of a 'swap'," the court said, adding the Commodity Exchange Act does not preempt Ohio's or Tennessee's gambling laws.
- This ruling marks the second major Appeals court defeat for the industry; the Third Circuit Court previously sided with federal jurisdiction, creating a circuit split likely to reach the Supreme Court.
- For many States, the core issue involves competition with regulated operators that pay taxes and enforce age limits of 21; the court illustrated complexity by referencing the New York Giants winning a Super Bowl as an 'event' example.
85 Articles
85 Articles
Tennessee Wins Appeal as Sixth Circuit Rejects Kalshi Challenge to State Sports Betting Laws
The Sixth Circuit Court of Appeals on Monday handed Tennessee a victory in the lawsuit brought by Kalshi, the prediction market company that sued the Volunteer State earlier this year, claiming the Tennessee Sports Wagering Council (TSWC) does not have the authority to regulate its predictions. “This is a great win for Tennessee," stated Tennessee Attorney General Jonathan Skrmetti. "Kalshi attempted an end run around Tennessee law to avoid any …
The Queen’s Polymarket Kryptonite
You’ve no doubt heard that Kalshi, Polymarket, and other prediction markets are fighting state officials around the country over whether their “event contracts” are really just sports gambling by another name—and, consequently, who gets to regulate them. And you won’t be surprised to hear that online sportsbooks like DraftKings and FanDuel have attracted claims over […]
News 5 Cleveland
After court ruling, Ohio Gov. Mike DeWine to hold Kalshi accountable for operating illegally
Ohio Gov. Mike DeWine is promising to hold prediction market platform Kalshi accountable for skirting state gambling regulations for years after a federal court ruling.
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