GoKawiilSixth Circuit rules Kalshi's sports contracts subject to Ohio, Tennessee gambling laws
A unanimous three-judge panel on the US Court of Appeals for the Sixth Circuit ruled that Kalshi's sports-event contracts do not qualify as federally regulated swaps, meaning Ohio and Tennessee can enforce their own gambling laws against the platform. The decision upheld a lower court ruling against Kalshi in Ohio and reversed a prior Tennessee ruling that had favored the company. The court also said that even if the contracts were swaps, federal law would not block states from applying their gambling statutes.
GoKawiil's interpretation of the reporting above, not reported fact.
The ruling deals another legal setback to Kalshi's argument that federal commodities regulation preempts state gambling oversight, a stance the company has used to offer sports-related contracts nationwide without state licenses or taxes. With multiple state regulators pursuing enforcement, this and similar appellate rulings could force Kalshi to seek state-level compliance or scale back operations in jurisdictions with strict betting laws. The decision may also embolden other states to pursue their own actions against prediction markets offering sports contracts.
- Sixth Circuit unanimously ruled Kalshi's sports contracts aren't federally protected 'swaps'.
- Court said states could enforce gambling laws even if contracts were swaps, rejecting federal preemption.
- Ruling upholds Ohio's case against Kalshi and reverses a prior Tennessee win for the company.
Source: arstechnica.com, 2026-09-28
Published there as: “Kalshi loses again as judges rule prediction markets must obey gambling laws”
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