Sixth Circuit rules Kalshi sports-event contracts are not swaps
The U.S. Court of Appeals for the Sixth Circuit ruled that Kalshi's sports-event contracts are not swaps under federal law, conflicting with other circuits that have treated similar prediction-market products differently. Kalshi operates a designated contract market registered with the Commodity Futures Trading Commission (CFTC). The ruling widens a circuit split that leaves platforms without national regulatory clarity on whether CFTC registration shields event contracts from state gambling enforcement.
Kalshi now faces contradictory federal precedent across circuits, and each new ruling becomes ammunition for state attorneys general. The Ohio and Tennessee losses already showed that some courts reject CFTC preemption; this Sixth Circuit swap ruling adds a separate federal layer that states can exploit. Competitors like Polymarket, already under New York suit, must price the same litigation risk into launch timelines.
National markets fragment because contract legality shifts at state borders, not CFTC registration. The Supreme Court petitions from New Jersey, Robinhood, and Crypto.com remain stalled, so platforms must fund parallel state defenses with no federal floor. The first operator to lose another major state case will set the compliance template rivals race to meet.