Appeals court says Ohio and Tennessee can regulate Kalshi under gambling laws
The 6th Circuit ruled on September 26 that Ohio and Tennessee may apply their gambling laws to Kalshi, letting the states regulate the prediction-market platform under state gaming statutes rather than deferring to federal CFTC oversight. The decision deepens a circuit split over whether CFTC registration shields event-contract platforms from local gambling law. It follows a 9th Circuit ruling last month that Kalshi's contracts are subject to Nevada's gambling laws.
Kalshi now faces enforceable gambling-law barriers in Ohio and Tennessee on top of its 9th Circuit loss. The 6th Circuit joins the 9th in rejecting federal preemption, conflicting with the 3rd Circuit and leaving Kalshi with no clean nationwide operating framework. Kalshi must either geofence more jurisdictions or fight parallel state cases while legal budgets drain.
Robinhood shares identical exposure because the same reasoning reaches any CFTC-registered platform offering sports-linked contracts. The Supreme Court is the only venue for uniform rules. Every month of delay risks another state or tribal filing that fragments the national market further.
This is the second federal appeals circuit to reject Kalshi's federal preemption defense, after the Ninth Circuit's Nevada ruling, deepening a split with the Third Circuit that makes Supreme Court review more likely but also leaves state enforcement windows open.