Appeals Court Rules States Can Regulate Kalshi’s Sports Prediction Markets
A U.S. Sixth Circuit Court of Appeals ruled that Ohio and Tennessee can regulate sports-related event contracts on prediction market platform Kalshi under state gambling laws, marking another legal setback for the industry. The decision rejects Kalshi's argument that these contracts are swaps regulated by the Commodity Futures Trading Commission (CFTC). This is now the second major loss at the appeals court level for platforms like Kalshi and could lead to a Supreme Court review of jurisdiction over prediction markets. The ruling overturns an earlier Tennessee district court decision in favor of Kalshi, while affirming Ohio's lower court support for state regulation. The CFTC has sued nine states claiming exclusive regulatory authority under the Commodity Exchange Act (CEA), but this latest opinion says neither express nor implied preemption exists to block state laws from applying. The legal battle continues as other circuits have issued conflicting rulings, with a third circuit recently supporting federal jurisdiction and a ninth upholding Nevada's right to regulate. New Jersey has already petitioned the Supreme Court for review.
Topics: CFTC gambling_laws Kalshi prediction_markets