Sixth Circuit Clears Ohio, Tennessee To Enforce Laws Against Kalshi
The ruling removes preliminary protections for the prediction-market operator but does not itself order user blocks in either state.
A federal appeals court on Sept. 25 cleared Ohio and Tennessee to enforce gambling laws against Kalshi’s sports-event contracts, removing court protections that had limited state action against the exchange.
The unanimous Sixth Circuit ruled that Kalshi’s contracts do not qualify as swaps under the Commodity Exchange Act, the federal law governing certain derivatives and the Commodity Futures Trading Commission’s authority. The court also said state gambling laws would remain enforceable even if the contracts were treated as swaps.
The decision affirmed an Ohio court’s refusal to issue Kalshi a preliminary injunction and vacated a Tennessee injunction that had blocked enforcement. The cases now return to lower courts.
Kalshi argued that federal exchange rules require it to provide impartial access to markets it offers, making state-by-state restrictions impractical. The appeals court rejected that position, saying the access requirement does not necessarily cover every market in every state and that geofencing could restrict sports contracts where state law prohibits them.
The ruling does not itself require Kalshi to block users in Ohio or Tennessee. Kalshi still faces possible state enforcement while the Ohio and Tennessee cases return to the lower courts.
