Court rules Kalshi sports contracts subject to Tennessee gambling laws
A federal appeals court ruled that Kalshi's sports-event contracts are subject to Tennessee's sports-wagering laws. The Tennessee Sports Wagering Council had ordered Kalshi to stop offering the contracts to state customers, prompting the legal dispute. Tennessee has now won the court fight, though the sources do not specify the precise ruling or legal reasoning behind the decision. The ruling follows a related Sixth Circuit decision concerning Ohio.
Kalshi's federal preemption shield now has a fresh crack in the Sixth Circuit. The platform must geofence Tennessee immediately or risk enforcement by the state council that first ordered the halt. That adds a third jurisdiction to Kalshi's compliance map, after Nevada and Ohio, with each new loss emboldening states with parallel suits.
Legal spend compounds faster than any single case resolves. Traders hold positions whose validity shifts with state borders, not regulation. The platform's national sports market fragments further. The Supreme Court remains Kalshi's only path to uniform rules, but delay risks more state bans before any cert grant. Copycat filings in Connecticut and elsewhere gain momentum from each circuit loss.
The Sixth Circuit's September 25 ruling for Ohio and Tennessee joins the Ninth Circuit's August 28 Nevada loss to crack Kalshi's federal preemption shield in two circuits, with Washington and Connecticut suits still running.