Sixth Circuit lets Ohio and Tennessee enforce gambling laws against Kalshi
The U.S. Court of Appeals for the Sixth Circuit ruled on September 25, 2026 that Ohio and Tennessee can apply their gambling laws to Kalshi. The Cincinnati-based court found that Kalshi's sports-related event contracts do not meet the definition of swaps. The decision allows state gambling regulators to enforce statutes against the CFTC-registered prediction market platform. Conflicting appeals court rulings create uncertainty about the boundary between state gambling laws and federal oversight for regulated platforms.
Kalshi must now geofence two large states while fighting parallel preemption battles in Missouri, Washington, and Connecticut. The Sixth Circuit's reasoning—that CFTC designation does not automatically exempt sports contracts from state gaming laws—matches the Ninth Circuit's tribal rulings and emboldens attorneys general with active proceedings.
Each new loss compounds legal spend faster than any single case resolves. Traders hold positions whose validity shifts with state borders. The Supreme Court remains Kalshi's only path to uniform rules. The growing circuit split makes a cert grant more plausible, but every month of delay risks another state closing its market.