Federal Appeals Court Rules Ohio and Tennessee Can Regulate Kalshi's Prediction Markets
A federal appeals court has upheld the right of Ohio and Tennessee to regulate prediction markets under their existing gambling laws. The ruling, issued by the U.S. Sixth Circuit Court of Appeals in Cincinnati on Friday, supports state efforts to apply anti-gambling statutes to contracts related to sports events offered by Kalshi (KALSHI). This decision challenges Kalshi's position that its platform operates outside traditional gambling frameworks. The court’s ruling could set a precedent for how states approach the regulation of prediction markets and similar financial instruments. It also raises questions about whether such platforms can continue operating in multiple jurisdictions without facing legal pushback from state governments, which may view them as forms of unregulated betting. This outcome marks a setback for Kalshi's strategy to position itself within a regulatory gray area between traditional gambling and securities trading.
