Sixth Circuit rules against Kalshi in second event contracts loss
The U.S. Court of Appeals for the Sixth Circuit ruled against Kalshi in its event contracts case. The court found Kalshi failed to show the contracts qualified for federal preemption. In January, Tennessee demanded a halt to Kalshi's sports contracts alongside those of Polymarket and Crypto.com. Three appeals courts have since ruled on the matter. Specific details on the rulings and which courts issued them were not provided.
Kalshi now lacks federal preemption in a second major circuit, giving states a clear roadmap to treat its sports contracts as gambling. Ohio and Tennessee can enforce their gaming laws directly, and attorneys general in Connecticut, Baltimore, and Missouri have active proceedings that can cite this precedent. Kalshi must either geofence users state by state or fight each jurisdiction separately, multiplying legal spend across parallel cases that will take years to resolve.
The circuit split between the Ninth and Sixth Circuits strengthens the case for Supreme Court review, but cert grants are rare and the docket moves slowly. Traders hold positions whose validity now shifts with state borders, fragmenting liquidity before any higher court answers. The first state enforcement action under this precedent will set the compliance bar every rival must meet.