Sixth Circuit Court Rules Against Kalshi on Sports Betting Jurisdiction

The U.S. Sixth Circuit Court of Appeals has ruled that sports-related event contracts offered by prediction market platform Kalshi do not qualify as 'swaps' under the jurisdiction of the CFTC, placing them instead under state gambling regulations. This decision adds to a growing 'circuit split' as the Third, Eighth, and Ninth Circuits have issued varying opinions on the matter, increasing the likelihood of a U.S. Supreme Court intervention. The ruling impacts the compliance strategies of various prediction markets, which may now face increased pressure to adhere to state-level licensing, tax, and age-restriction requirements.