Sixth Circuit rules states can regulate Kalshi prediction markets
A federal appeals court ruled against prediction market platform Kalshi on September 25, finding that states have authority to regulate prediction markets. The decision in the Ohio-Tennessee cases affirms state-level regulatory power over platforms like Kalshi and adds to its mounting legal challenges.
Kalshi must now fight preemption battles on yet another front as the Sixth Circuit verdict joins Nevada losses that strip its federal shield. The ruling emboldens attorneys general in jurisdictions with active proceedings to file copycat suits, compounding legal spend faster than any single case resolves.
Traders hold positions whose validity shifts with state borders while platform engineering teams scramble to build geofencing for each new jurisdiction lost. Each state win against preemption encourages the next attorney general to test the same theory locally. Kalshi's only path to uniform national rules remains the Supreme Court, and the deepening circuit split makes a cert grant more plausible.
Becomes the latest major ruling against Kalshi's preemption claim, after Nevada's federal shield loss, deepening the circuit split pressing toward Supreme Court review.