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Sixth Circuit Opinion Deals Kalshi Another Major Legal Blow

Legal Writer

Publish Date: Sep 28, 2026

Fact checked by: Matt Moreno

Key Points

Appellate ruling gives Ohio and Tennessee authorities clearance to enforce states' gambling laws against Kalshi
Ohio officials have threatened Kalshi with fines amid legal dispute over sports event contract trading
Decision deepens circuit court split relevant to outstanding US Supreme Court petitions

A three-judge panel from the United States Sixth Circuit Court of Appeals has issued a decidedly negative opinion for Kalshi in its legal disputes with governmental figures in Ohio and Tennessee. The opinion leaves Kalshi vulnerable to enforcement actions in both states.

The panel's decision carries national weight as well. It's the third opinion from a circuit court on the legal nature of Kalshi's sports event contracts. The balance weighs against Kalshi's legal arguments so far.

Judges rule that federal law does not protect Kalshi's prediction market exchange

The panel released its opinion on Friday, Sept. 25. The court consolidated the appeals of Kalshi's lawsuits against Ohio and Tennessee officials because the issues at hand were identical.

The main question before the panel was whether federal law prevented those officials from enforcing their respective state gambling laws against Kalshi, especially in regard to sports event contract trading. Both states have regulated systems for sports wagering.

The panel unanimously found that Kalshi was not entitled to that protection.

"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.' And, even assuming that Kalshi’s sports-event contracts are swaps, we alternatively hold that the CEA neither expressly nor impliedly preempts Ohio’s or Tennessee’s gambling laws."

As a result, Ohio and Tennessee gambling regulators and law enforcement are free to take action, at least until the district courts can rule on the merits of the respective cases. Ohio officials could move on that expediently.

Tennessee Volunteers Team

Kalshi could face fines in Ohio

Gambling regulators in Ohio have recommended a fine for Kalshi's offering of sports event contracts. At the time, former Ohio Attorney General David Yost announced his support for the fine.

The original amount was $5 million. Current Ohio Attorney General Andy Wilson has not publicly commented on whether he will enforce the fine as of the time of this writing.

Tennessee gambling regulators sent Kalshi a cease-and-desist order. Enforcement of that order had been blocked until the Sixth Circuit panel issued its decision, though.

These state authorities could move on the matter now, but there is reason to hesitate as well. The Sixth Circuit panel's opinion is just one of several moving parts across the US.

Supreme Court could weigh in on prediction market legality

The two other circuit courts to issue opinions on these issues so far are the Third Circuit and the Ninth Circuit. The Third Circuit's opinion stands in stark contrast to the rulings out of the Sixth Circuit and the Ninth Circuit.

The Third Circuit panel found that sports event contracts are swaps under federal law. It also ruled that federal law likely bars New Jersey authorities from enforcing their gambling laws against Kalshi.

The Ninth Circuit's opinion in a dispute between Kalshi and Nevada officials is in line with the Sixth Circuit's decision. Parties to both the Nevada and New Jersey cases have asked the US Supreme Court to review the rulings.

Kalshi may join that chorus with its appeal of the Sixth Circuit's opinion. If the Supreme Court takes up any of the cases, the Sixth Circuit panel's word won't be the final one in this matter.

Looking for more news and updates? Head over to our Ballislife Play page.

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