Kalshi loses again as judges rule prediction markets must obey gambling laws

A federal appeals court has ruled once again that the US government holds exclusive jurisdiction over prediction markets, dismissing Kalshi's claim that regulation should be left to Congress. In a unanimous decision, a three-judge panel from the US Court of Appeals for the Sixth Circuit sided with Ohio and Tennessee, overturning Kalshi's position.

While the Commodity Futures Trading Commission has authority over swaps, the judges determined that sports wagers on Kalshi do not meet the legal criteria for swaps. Even if they were considered swaps, the court ruled that Congress's regulatory framework does not prevent states from enforcing their gambling laws on prediction markets.

Judge Julia Smith Gibbons, a George W. Bush appointee, wrote the ruling, stating that Kalshi has not demonstrated its sports-event contracts meet the statutory definition of a swap and that the Commodity Exchange Act does not pre-empt Ohio's or Tennessee's gambling laws.