Appeals court sides with Ohio and Tennessee in Kalshi sports-contract dispute
A federal appeals panel ruled unanimously that Ohio and Tennessee may apply their gambling laws to Kalshi’s sports-event prediction contracts. The court found Kalshi had not shown the contracts qualify as swaps under federal law, which would have given the CFTC exclusive jurisdiction. The Sixth Circuit’s decision matches a recent Ninth Circuit outcome but conflicts with an April Third Circuit ruling, raising the prospect of Supreme Court review.
The Sixth Circuit panel unanimously rejected Kalshi’s argument that its sports-event contracts are federally regulated swaps. It also held that, even if they were swaps, the Commodity Exchange Act would not expressly or impliedly displace Ohio’s or Tennessee’s gambling laws. The appeals court resolved two lower-court outcomes: it reversed a Tennessee injunction favoring Kalshi and upheld Ohio’s refusal to block state action.
The ruling aligns with a Ninth Circuit decision last month concerning Nevada, but diverges from an April Third Circuit decision that allowed Kalshi to continue in New Jersey. State legislators have filed an amicus brief asking the Supreme Court to settle the jurisdictional conflict, while Kalshi’s appeals continue.
The split could affect prediction-market users, sports bettors, state regulators, and exchanges. If states may enforce gambling laws, platforms might restrict offerings or face compliance costs; consumers could see reduced access or different protections. A Supreme Court review may clarify federal-state authority, potentially shaping how event contracts are treated nationwide.