Kalshi · regulatory
Sixth Circuit Leaves Kalshi Sports Contracts Open to Ohio and Tennessee Gambling Laws
The Sixth Circuit held that federal commodities law does not shield Kalshi's sports-event contracts from Ohio and Tennessee gambling laws, increasing the company's exposure to state licensing, tax and enforcement requirements in those two cases.
Is Kalshi banned from offering sports contracts nationwide?
No. The September 25 ruling concerns Kalshi's cases in Ohio and Tennessee and does not impose a nationwide ban.
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What did the Sixth Circuit decide?
The court held that Kalshi had not shown its sports-event contracts qualify as swaps under the Commodity Exchange Act. It also held that, even if they were swaps, federal law would not preempt Ohio or Tennessee gambling laws.
Why does the ruling matter for Kalshi?
Ohio and Tennessee impose licensing, tax and consumer-protection requirements that the court said Kalshi currently does not follow, while regulators in both states have issued cease-and-desist demands over its sports contracts.
Did the court find Kalshi already liable under state gambling law?
No. The appeals concerned preliminary injunctions and federal preemption, and the court remanded both cases for further proceedings.
What happens next in the two cases?
The Ohio court's denial of Kalshi's preliminary injunction remains in place, the Tennessee injunction has been vacated, and both cases return to their federal district courts.
Sources
- U.S. Court of Appeals for the Sixth Circuit — KalshiEX LLC v. Schuler; KalshiEX LLC v. Orgel
- CoinDesk — Another appeals court rules against prediction market provider Kalshi, says sports contracts are subject to state regulations
Original signal: CoinDesk ↗
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