Kalshi Loses Appeal as Sixth Circuit Court Upholds Ohio and Tennessee Gambling Laws

The U.S. Sixth Circuit Court of Appeals ruled that the prediction market platform Kalshi failed to prove that its sports event contracts qualify as "swaps" under the definition in the Commodity Exchange Act, and therefore are not subject to the jurisdiction of the Commodity Futures Trading Commission (CFTC). Even if they were considered "swaps," federal law does not take precedence over the sports betting regulations of Ohio and Tennessee. The court upheld the Ohio district court's decision to deny a preliminary injunction and vacated the injunction from the Tennessee district court, allowing both states to continue enforcing their laws against Kalshi. This ruling exacerbates the split among federal circuit courts on the issue, with the Ninth Circuit previously supporting state rights and the Third Circuit siding with Kalshi. The case may ultimately be appealed to the Supreme Court.

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