Kalshi must lock out state users after major court loss
The Sixth Circuit ruled that Ohio and Tennessee may enforce gambling laws against Kalshi’s sports contracts, rejecting its claim that federal exchange regulation preempts state rules. The court said geofencing could let Kalshi comply with both, and held that the contracts may not qualify as swaps under the Commodity Exchange Act; even if they do, state laws remain in force. The decision affirmed an Ohio ruling, lifted Kalshi’s Tennessee injunction and applies in federal courts across the circuit. Along with a similar Ninth Circuit ruling, it strengthens states’ ability to restrict sports prediction markets, while the Third Circuit has sided with Kalshi. The split could reach the Supreme Court. State restrictions threaten a large share of Kalshi’s modeled sports demand, though those estimates rely on indirect indicators because the company does not publish state-level trading data.
