US appeals court rules states can regulate Kalshi's sports event contracts
The Sixth Circuit ruled unanimously that Ohio and Tennessee can apply state gambling laws to Kalshi's sports event contracts, finding they are not 'swaps' under exclusive CFTC jurisdiction.
A US federal appeals court ruled on Friday that states can regulate prediction-market operator Kalshi’s sports event contracts under their gambling laws — another defeat for the company in its fight over whether its products are federally regulated financial instruments.
The Sixth Circuit Court of Appeals held Kalshi had not shown its sports event contracts are “swaps” under the Commodity Futures Trading Commission’s exclusive jurisdiction, and that federal law did not preempt Ohio’s or Tennessee’s gambling laws, Reuters reported (https://www.reuters.com/business/finance/us-appeals-court-rules-against-kalshi-says-states-can-regulate-prediction-2026-09-25/).
The three-judge panel ruled unanimously that Ohio and Tennessee may apply their gambling laws to Kalshi’s sports-related event contracts. “We hold that Kalshi has not shown that its sports-event contracts satisfy the statutory definition of a ‘swap’ so as to fall within the scope of the CFTC’s ‘exclusive jurisdiction,’” the opinion said, according to CNBC (https://scoopfeeds.com/article/ae18a28e-db07-532c-9a76-e447e4f90d1b).
The ruling covers two cases Kalshi brought against Ohio and Tennessee regulators, seeking injunctions against state lawsuits; an Ohio court denied its request while a Tennessee court granted it, CoinDesk reported (https://www.coindesk.com/policy/2026/09/25/another-appeals-court-rules-against-prediction-market-provider-kalshi-says-sports-contracts-are-subject-to-state-regulations).
It deepens a split among appeals courts — the Third Circuit backed CFTC jurisdiction, the Eighth Circuit ruled sports contracts are not swaps — making Supreme Court review more likely; the Third Circuit case has already been appealed there.
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