Kalshi loses appeal, setting up potential Supreme Court case

The 6th US Circuit Court of Appeals has ruled against prediction market Kalshi, supporting the claims of Ohio and Tennessee to regulate sports-event contracts under their state gambling laws. On Friday, a three-judge panel unanimously sided with Ohio and Tennessee, declaring that the prediction market failed to prove its sports-event contracts are "swaps" under the jurisdiction of the Commodity Futures Trading Commission (CFTC).

This decision follows a similar ruling from the 9th Circuit Court of Appeals last month, which diverged from a March decision by the 3rd Circuit Court of Appeals that allowed Kalshi to operate in New Jersey. The April ruling suggested that Kalshi had a strong chance of success in its argument that federal law preempts New Jersey's regulations, creating a potential for a Supreme Court case.

State lawmakers had recently filed an amicus brief with the Supreme Court, urging the court to intervene in the dispute between Kalshi and state gaming authorities, potentially determining whether state authorities or federal agencies have jurisdiction over prediction market companies.