US Sixth Circuit Court Rules Kalshi Sports Contracts Subject to State Regulation

The U.S. Court of Appeals for the Sixth Circuit ruled on September 25 that sports-related event contracts offered by prediction market platform Kalshi do not qualify as "swaps" under federal law. Consequently, these contracts fall outside the jurisdiction of the Commodity Futures Trading Commission (CFTC) and are instead subject to state-level gambling and betting regulations. The ruling stems from legal disputes in Ohio and Tennessee, where state regulators argued that Kalshi's products unfairly bypassed state taxes and age restrictions. This decision deepens a judicial split, as the Third Circuit previously upheld CFTC jurisdiction, while the Sixth and Eighth Circuits support state oversight, potentially setting the stage for a Supreme Court review.