The Sixth Circuit ruled unanimously on Friday that Kalshi's sports event contracts are not swaps under the exclusive authority of the Commodity Futures Trading Commission (CFTC). The ruling lets Ohio and Tennessee enforce their gambling laws against the platform. Kalshi says it does not expect the decision to survive further review. Tennessee Attorney General Jonathan Skrmetti called it a win for the state.
The Sixth Circuit ruled unanimously on Friday that Kalshi has not shown its sports event contracts are swaps under the exclusive authority of the Commodity Futures Trading Commission (CFTC). Judge Julia Smith Gibbons wrote that swaps generally refer to financial measures used for hedging and price information, and that the number of corner kicks in a match does not meet that purpose.[1], [2]
The court said the federal Commodity Exchange Act does not preempt Ohio's and Tennessee's gambling rules. The ruling vacated Tennessee's injunction and left Ohio's denial in place, so both states may enforce their gambling laws against the platform. Tennessee Attorney General Jonathan Skrmetti called the decision a win for the state.[1], [2]
Kalshi spokesperson Dani Lever said a state-by-state patchwork does not work and that the company does not expect the decision to survive further review. The appeals courts are split: the Ninth Circuit ruled against Kalshi in Nevada last month, and the Third Circuit ruled for Kalshi in New Jersey in April. New Jersey has asked the Supreme Court to overturn the Third Circuit decision. The ruling does not shut Kalshi down nationwide; it recognises two states' power to regulate it.[1]
