Federal appeals court rules states may apply gambling laws to Kalshi prediction markets
A three-judge panel in the Sixth Circuit Court of Appeals ruled on Friday that states like Ohio and Tennessee can enforce their gambling regulations against the prediction platform Kalshi. The decision challenges Kalshi's argument that it falls under exclusive federal oversight.
The unanimous decision, authored by Judge Julia Smith Gibbons, determined that Kalshi's sports-related contracts do not qualify as "swaps" under the legal definition. Because they do not meet this criteria, the court found they do not fall under the exclusive jurisdiction of the US Commodity Futures Trading Commission (CFTC).
Ars Technica reports that the court also addressed the possibility of federal preemption. Even if the platform's contracts were classified as swaps, the judges concluded that the Commodity Exchange Act does not prevent states from applying their existing gambling laws to these prediction markets. This ruling suggests that Kalshi must navigate a complex landscape of both federal and state-level regulations regarding sports wagering.
Source: Kalshi loses again as judges rule prediction markets must obey gambling laws
