Kalshi Tells Sixth Circuit: Re-Run That Ruling, Sports Bets Are Swaps 🥊

Kalshi has asked the full Sixth Circuit Court of Appeals to reconsider a September 25 ruling that allowed Ohio and Tennessee to enforce state gambling laws against its sports-related prediction contracts. The company filed a petition seeking rehearing en banc after a three-judge panel affirmed Ohio's denial of an injunction against the Ohio Casino Control Commission and lifted an injunction that had blocked Tennessee's Sports Wagering Council from acting against Kalshi.

The panel's decision turned on whether Kalshi's sports event contracts qualify as swaps under federal commodities law. The judges concluded that Kalshi had not established the contracts as swaps, and that even if they did qualify, federal commodities law would not preempt the state gambling statutes at issue. Kalshi's lawyers argue the ruling conflicts with other federal appellate decisions and with Sixth Circuit precedent, and that Congress granted the Commodity Futures Trading Commission exclusive jurisdiction over contracts traded on designated contract markets.

The underlying state actions stem from a March 2025 Ohio Casino Control Commission order barring Kalshi from offering sports contracts in Ohio and a January 2026 request from Tennessee's Sports Wagering Council to halt similar activity. Kalshi is contesting both findings and asking the Sixth Circuit either the original panel or the full court to revisit the legal analysis.

Separately, the CFTC on October 9 proposed a rule that would bring event contracts covering sports, politics, cultural events and weather within the federal swap definition, while carving out wagers that qualify as casino gaming. CFTC Chairman Michael Selig described the products as "commodity derivatives" as the agency opened the proposal to public comment.

The Sixth Circuit's rehearing request leaves the existing state enforcement actions in place while the court considers whether to take up the case. Kalshi has urged the court to treat prediction-market contracts traded on a designated exchange as falling under federal authority, setting up a clash with Ohio and Tennessee regulators who view sports-event offerings as state-regulated gambling.