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Another federal appeals court has ruled that states can enforce their gambling laws against the prediction market Kalshi, which asserts that it can only be regulated by the US government. On Friday, a three-judge panel in the US Court of Appeals for the Sixth Circuit ruled unanimously against Kalshi and in favor of Ohio and Tennessee. While the US Commodity Futures Trading Commission has exclusive jurisdiction over “swaps,” the judges found that sports wagers offered on Kalshi do not meet the legal definition of swaps. Moreover, the court found that even if Kalshi wagers were swaps, the regulatory scheme created by Congress would not prohibit states from enforcing gambling laws on prediction markets. “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,’” said the ruling written by Judge Julia Smith Gibbons, a George W. Bush appointee. “And, even assuming that Kalshi’s sports-event contracts are swaps, we alternatively hold that the CEA [Commodity Exchange Act] neither expressly nor impliedly preempts Ohio’s or Tennessee’s gambling laws.” Kalshi sued Ohio and Tennessee after gambling regulators in each state indicated they would bring enforcement actions against the prediction market. The appeals court ruling on Friday upheld an Ohio district court decision against Kalshi and vacated a Tennessee district court order that went in favor of Kalshi. Many states are trying to stop or restrict gambling on Kalshi, which offers sports betting throughout the US despite not obtaining state gambling licenses or paying state gambling taxes. Kalshi offers sports bets in some states where gambling on sports is entirely illegal and in other states where the law has restrictions on betting that Kalshi does not follow.
document fetched 2026-09-29 02:59 · canonical https://arstechnica.com/tech-policy/2026/09/another-court-rules-kalshi-sports-bets-arent-swaps-says-states-can-crack-down