# Appeals Court Rules States Can Regulate Kalshi Sports Contracts

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/24271
Published: 2026-09-25T21:12:16.000Z
Updated: 2026-09-25T21:12:16.000Z
Section: Regulation

> The unanimous ruling lets Ohio and Tennessee apply gambling laws to Kalshi’s sports event contracts, adding to a growing appeals-court split over federal oversight.

The 6th U.S. Circuit Court of Appeals ruled Friday that Ohio and Tennessee can apply their gambling laws to Kalshi’s sports-related event contracts, strengthening states’ authority over prediction markets.

The unanimous three-judge panel said Kalshi had not shown that its sports contracts meet the legal definition of swaps, which would place them under the Commodity Futures Trading Commission’s exclusive jurisdiction.

The court also ruled that federal commodities law does not prevent Ohio or Tennessee from enforcing their gambling statutes, overturning a Tennessee federal district court decision that had favored Kalshi. A federal court in Ohio had previously backed the states’ position.

Kalshi and other prediction-market platforms argue that event contracts are financial derivatives. States have argued that sports contracts function as betting products and should be governed by state gambling laws.

The decision is the second appeals-court loss for sports prediction markets in less than a month. The 9th U.S. Circuit Court of Appeals recently ruled that Nevada could regulate similar contracts, while the 3rd U.S. Circuit Court of Appeals ruled in April that the CFTC has exclusive authority over swaps in a case involving New Jersey.

The conflicting rulings increase pressure for the U.S. Supreme Court to resolve which level of government can regulate sports-related event contracts.