Sixth Circuit reportedly lets Ohio and Tennessee enforce gambling laws against Kalshi

A ruling on whether sports contracts count as swaps

Ars Technica reported that a three-judge Sixth Circuit panel ruled unanimously that Kalshi’s sports-event contracts do not meet the legal definition of swaps for the claimed exclusive jurisdiction of the US Commodity Futures Trading Commission.

The court also reportedly held that, even if the contracts were swaps, federal law would not bar Ohio and Tennessee from applying their gambling laws. The ruling upheld an Ohio district-court decision against Kalshi and vacated a Tennessee district-court order that had favored the company.

The report says federal appeals courts had already reached differing outcomes over whether states can regulate Kalshi’s sports-event contracts.

According to the report, the Sixth Circuit joined the courts allowing state gambling-law enforcement, holding that Kalshi had not shown its sports-event contracts were swaps under the relevant federal jurisdiction and that federal law did not preempt Ohio or Tennessee gambling laws.

Appellate courts have reached different outcomes

The reported ruling adds another appellate-court decision to an unresolved dispute over whether state gambling rules apply to prediction-market sports contracts. Ars Technica reported that other federal appeals courts have reached different outcomes and that a case involving Maryland remains pending.