Kalshi seeks full Sixth Circuit rehearing after sports contracts ruled gambling
The U.S. Court of Appeals for the Sixth Circuit ruled September 25 that Kalshi's sporting event contracts are subject to Ohio and Tennessee state gambling laws, consolidating two state cases. The court vacated a Tennessee injunction and affirmed an Ohio district court decision. Kalshi has filed for a rehearing. The cases center on whether CFTC-regulated event contracts can be classified and taxed as sports gambling under state law. Senate Bill 430 in Ohio would establish that sporting event contracts are a form of sports gambling.
Kalshi's federal preemption shield is now gone in two states consolidated under one circuit ruling, and every state attorney general with a pending investigation has a ready template to copy. If the full Sixth Circuit denies rehearing, Kalshi must choose between expensive geofences that block users state by state, product redesign that strips sports contracts from its marketplace, or parallel lawsuits in Michigan, Nevada, and California without guaranteed federal backup.
Each path burns cash faster than the CFTC's swap-rule proposal can advance through White House review. The NFL has already backed New Jersey's Supreme Court bid to cement the state-gambling framing, giving state enforcers a powerful commercial ally. Competitors like Polymarket and ForecastEx face identical risk: whoever loses the next major state case sets the compliance bar every platform races to clear.
Joins a widening circuit split that already has the NFL pressing the Supreme Court to cement state-gambling framing and a former CFTC counsel predicting high court review.