Three-Circuit Split Deepens Over Kalshi Gambling Rules
Kalshi event contracts can face state gambling laws after a federal appeals court backed Ohio and Tennessee in a widening circuit split. The post Three-Circuit Split Deepens Over Kalshi Gambling Rules appeared first on ReadWrite .
The 6th U.S. Circuit Court of Appeals in Cincinnati has ruled that Ohio and Tennessee can regulate Kalshi's event contracts under their state gambling laws. This decision weakens Kalshi's fight to maintain federal oversight over the prediction market industry. Writing for a unanimous panel, Circuit Judge Julia Smith Gibbons stated that Kalshi failed to demonstrate its sports event contracts qualify as swaps regulated by the Commodity Futures Trading Commission (CFTC).
The ruling also confirmed an Ohio federal judge's denial of an injunction against Tennessee's gambling statutes. Kalshi spokesperson Dani Lever criticized the decision, arguing that state-by-state regulations create inconsistencies and hinder market operations. The ruling joins an already divided appellate landscape, with the 9th Circuit finding Kalshi's contracts under Nevada's gambling laws and the 3rd Circuit ruling they are not subject to New Jersey's gambling statutes.
This further intensifies the debate over which framework should govern nationwide prediction market activities, potentially paving the way for Supreme Court review.
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