States May Regulate Kalshi
Sixth Circuit Rules Ohio and Tennessee Can Regulate Kalshi Sports Contracts
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The Sixth Circuit ruled that Ohio and Tennessee may regulate Kalshi’s sports event contracts under state gambling laws, rejecting the company’s argument that the contracts are swaps subject to the Commodity Futures Trading Commission’s exclusive jurisdiction. The court said Kalshi had not established that its contracts qualify as swaps and that federal law does not preempt the states’ gambling laws. The decision upheld the denial of Kalshi’s request for a preliminary injunction in Ohio and overturned an injunction it had won in Tennessee, allowing state enforcement efforts to proceed.
Key Points
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The panel said the state laws do not expressly preempt the Commodity Exchange Act because they do not directly regulate designated contract markets (DCMs), but have only incidental effects on them.
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Senior Judge Julia Smith Gibbons wrote the opinion, joined by Judges Eric L. Clay and Rachel S. Bloomekatz.
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The decision marked Kalshi’s second loss in three federal appellate court rulings, according to Sports Betting Dime.
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