Sixth Circuit rules Tennessee and Ohio can enforce betting laws against Kalshi
The U.S. Court of Appeals for the Sixth Circuit ruled September 28 that Tennessee and Ohio may regulate Kalshi's event contracts under state gambling laws. The unanimous appellate decision rejected Kalshi's argument that federal commodities law preempts state oversight of its sports-linked contracts. The ruling upholds Tennessee's enforcement position and marks a further setback for the CFTC-registered platform's federal preemption defense.
Kalshi must now geofence Ohio and Tennessee or restructure its sports offerings to comply with state gambling statutes. The ruling strips away a key federal shield the platform leaned on to operate nationwide under CFTC oversight alone. Other CFTC-regulated venues face identical exposure, as the same reasoning reaches any platform offering sports-linked contracts.
The circuit split deepens after the Ninth Circuit's August decision against Kalshi on tribal lands, pressuring the Supreme Court to resolve whether states can override federal registration. Legal spend compounds across parallel cases while traders hold positions whose validity shifts with state borders. Kalshi's national sports market fragments further with each new state-level defeat.
The Sixth Circuit decision joins the Ninth Circuit's tribal-lands ruling and parallel state suits in Connecticut and Washington, deepening the judicial split over whether CFTC registration shields prediction-market platforms from state gambling laws.