Sixth Circuit rules Ohio and Tennessee can regulate sports event contracts as gambling
The Sixth Circuit Court of Appeals ruled September 25 that Ohio and Tennessee may enforce state gambling laws against Kalshi's sports event contracts. The unanimous decision affirms state authority over this segment of the prediction market, rejecting federal preemption arguments. Kalshi faces overlapping state and federal regulatory challenges as a result. The ruling deepens legal pressure on the CFTC-regulated platform.
Kalshi's federal preemption shield is gone in the Sixth Circuit. Ohio and Tennessee gaming commissions can now enforce their gambling laws directly, forcing Kalshi to geofence or license in those states. The ruling joins the Ninth Circuit's Nevada decision to create a two-circuit pattern. Robinhood and Crypto.com face identical exposure.
Both platforms were mentioned in the opinion and will need their own compliance playbooks. Legal spend compounds across parallel cases faster than any single resolution. Traders hold positions whose validity shifts with state borders. The Supreme Court remains Kalshi's only path to uniform rules. Cert grants are rare and the docket is crowded.