A federal appeals court ruled Sept. 25 that Ohio and Tennessee may apply their gambling laws to Kalshi’s sports-events contracts.
Kalshi, which was valued in May at $22 billion, has been the focus of an intensifying legal battle over the ability of state gaming regulators to police businesses in the rapidly expanding prediction markets sector.
States argue that firms like Kalshi are operating platforms that allow bets without required state licenses and violate state gaming laws, including prohibitions on wagers by individuals under the age of 21.
On Sept. 25, a panel of the U.S. Court of Appeals for the Sixth Circuit held unanimously that the prediction market operator had not shown its sports-event contracts meet the federal Commodity Exchange Act’s definition of a “swap,” so they do not fall within the U.S. Commodity Futures Trading Commission’s (CFTC) exclusive jurisdiction. The cases are KalshiEX v. Schuler and KalshiEX v. Orgel….