TLDR
- Kalshi asked the full Sixth Circuit to reconsider a September 25 ruling that favored sports regulators in Ohio and Tennessee.
- The panel ruling lets both states enforce their gambling laws against Kalshi’s sports contracts.
- The CFTC proposed on October 9 to treat event contracts as swaps and separately excluded casino and sportsbook wagers.
- Courts are split, with the Third Circuit siding with Kalshi and the Ninth Circuit siding with Nevada.
- Kalshi must respond to New Jersey’s Supreme Court petition by November 9.
Kalshi has asked the full Sixth Circuit Court of Appeals to reconsider a ruling that favored sports regulators in Ohio and Tennessee. The request challenges a September 25 decision that allows those states to enforce their gambling laws against the company.
The petition asks either the original three-judge panel or the full appeals court to take a new look at the case.
What the Sixth Circuit Panel Decided
In its September ruling, the three-judge panel found that Kalshi had not shown its sports contracts qualify as swaps. The judges also found that even if they did, federal commodities law would not override state gambling laws.
As a result, the court upheld Ohio’s denial of an injunction. It also lifted an injunction that had blocked Tennessee regulators from acting against Kalshi.
The Ohio Casino Control Commission banned Kalshi from offering sports contracts in March 2025. Tennessee’s Sports Wagering Council made a similar demand in January 2026.
Kalshi’s lawyers argue that Congress gave the Commodity Futures Trading Commission “exclusive jurisdiction” over contracts traded on designated exchanges. They also say the ruling conflicts with decisions from other federal appeals courts and with earlier Sixth Circuit law.
CFTC Moves on New Prediction Market Rules
On October 9, the CFTC proposed including event contracts in the federal definition of a swap. The agency said these contracts cover sports, politics, cultural events and weather.
CFTC Chairman Michael Selig called the products “commodity derivatives” that fall under the commission’s authority. The regulator will take public comments for 30 days after the proposal is published in the Federal Register.
The CFTC also issued an interim final rule that excludes casino gambling and sportsbook wagers from the swap definition. The agency said that rule takes effect once it is published in the Federal Register.
Kalshi pointed to both CFTC actions in its petition as reasons for a new hearing. The company says there is a legal difference between event contracts traded on an exchange and bets placed with traditional bookmakers.
The fight is not limited to Ohio and Tennessee. Federal appeals courts in other parts of the country have reached different conclusions.
The Third Circuit ruled in favor of Kalshi in its dispute with New Jersey. The Ninth Circuit sided with Nevada regulators, and Kalshi asked the full Ninth Circuit to review that loss in September.
New Jersey officials are now asking the US Supreme Court to review the Third Circuit decision. On October 8, the NFL filed with the Supreme Court in support of the court taking up the issue.
The league said state gambling regulators offer better protection against threats to the integrity of sports betting.
Kalshi is not the only prediction market facing legal action. In September, New York sued Polymarket, accusing it of running an illegal gambling operation.
Kalshi must respond to New Jersey’s Supreme Court petition by November 9, according to the court docket.
