Sixth Circuit lets Ohio and Tennessee enforce sports betting laws on Kalshi

The Sixth Circuit unanimously ruled that Ohio and Tennessee can enforce their sports betting laws against Kalshi. The court held that Kalshi’s sports event contracts do not meet the legal definition of a swap. The court ruled that federal commodities law does not preempt either state’s gambling laws. The decision upheld Chief Judge Sarah D. Morrison’s March ruling that denied Kalshi a preliminary injunction in Ohio. The decision vacated Judge Aleta A. Trauger’s February injunction in Tennessee. The Tennessee case returns to the district court. The court said the swap definition covers events inherently tied to financial consequences. The court said the effects of sports games on sponsors, advertisers, and local businesses are too indirect and speculative. Kalshi began listing sports event contracts in January 2025. The Ohio Casino Control Commission ordered Kalshi to stop offering the contracts without a license. Tennessee’s Sports Wagering Council issued a similar order in January. Kalshi obtained a temporary restraining order in Tennessee days later. Kalshi spokesperson Dani Lever said the company disagreed with the ruling. Lever said the law does not require a swap to involve intrinsic financial consequences. Lever said the decision showed why a state-by-state system does not work. The Ninth Circuit ruled against Kalshi in a Nevada case on Aug. 28. The Third Circuit sided with Kalshi in an April case against New Jersey. New Jersey Attorney General Jennifer Davenport asked the Supreme Court on Sept. 2 to review that decision. Kalshi’s appeal in Maryland remains pending before the Fourth Circuit. The CFTC filed an amicus brief supporting Kalshi in the Ohio appeal in May. More than a dozen states have taken enforcement action or filed lawsuits against Kalshi over its sports contracts. Kalshi recorded $38.67 billion in trading volume in August, according to The Block’s data dashboard.