Sixth Circuit Rules Kalshi Sports Contracts Are Not Federal Swaps
The ruling allows Ohio and Tennessee to apply their gambling laws to Kalshi’s sports-event contracts and removes a key federal shield for the platform.
A federal appeals court ruled Friday that Kalshi’s sports-event contracts are not federally regulated swaps, allowing Ohio and Tennessee to enforce their gambling laws against the prediction-market platform.
The unanimous three-judge panel of the Sixth Circuit held that Kalshi had not shown its contracts fell within the Commodity Futures Trading Commission’s exclusive jurisdiction. The decision removes the federal preemption argument Kalshi used to challenge state oversight.
The court affirmed an Ohio district court’s refusal to block enforcement action against Kalshi. It also vacated a Tennessee district court injunction that had protected the platform and sent that case back for further proceedings.
The ruling centers on whether sports outcomes have the type of direct financial, economic or commercial consequences covered by the Commodity Exchange Act. The court found that any effects on sponsors, advertisers and local businesses were too indirect and speculative to meet that standard.
Kalshi began offering sports-event contracts in 2025. The company has argued that its federally registered market should operate under one national framework rather than comply with separate state gambling rules.
The decision adds to conflicting appellate rulings over prediction-market regulation. The dispute is moving toward a broader resolution over whether sports-event contracts should be treated as financial products or state-regulated gambling.
