Sixth Circuit Rules States Can Regulate Kalshi’s Sports Prediction Markets

A federal appeals court ruled on Friday that Kalshi’s sports-related event contracts are not swaps, a decision that clears the way for Ohio and Tennessee to regulate the prediction-market operator under their own gambling laws instead of the Commodity Futures Trading Commission’s rules.

The unanimous Sixth Circuit panel set out its reasoning in a published opinion resolving two appeals Kalshi brought against regulators in both states.

What the court held Writing for the panel, Circuit Judge Julia Smith Gibbons said Kalshi had failed to show that its sports-event contracts meet the Commodity Exchange Act’s definition of a swap, which would place them under the CFTC’s exclusive jurisdiction.

“We hold that Kalshi has not shown that its sports-event contracts satisfy the statutory definition of a ‘swap’ so as to fall within the scope of the CFTC’s ‘exclusive jurisdiction,'” the ruling states.