6TH CIR.Court order
Sixth Circuit rules states can regulate Kalshi sports event contracts, finding CEA does not preempt state gambling laws
A unanimous Sixth Circuit panel ruled that state regulators in Ohio and Tennessee can enforce gambling laws against Kalshi's sports prediction markets. Judge Gibbons wrote that Kalshi failed to prove event contracts are statutory swaps under CFTC exclusive jurisdiction, and alternatively held the Commodity Exchange Act does not preempt state gaming statutes. The court affirmed denial of an Ohio injunction and vacated Tennessee injunctive relief.
Order (U.S. Court of Appeals for the Sixth Circuit) → · Courthouse News Service, CoinDesk, Unchained
Key points
- The Sixth Circuit deepened a federal circuit split following Ninth Circuit agreement with Nevada and Third Circuit siding with New Jersey.U.S. Court of Appeals for the Sixth CircuitCourthouse News Service
- Judge Gibbons concluded sports-event contracts do not meet the CEA statutory swap definition because payoffs do not derive from financial commodities.U.S. Court of Appeals for the Sixth CircuitCoinDesk
- The court held that even if contracts were swaps, CEA savings provisions preserve state authority to enforce state anti-gambling criminal laws.U.S. Court of Appeals for the Sixth CircuitUnchained
- Ohio Casino Control Commission and Tennessee Sports Wagering Council had threatened enforcement actions against Kalshi for unlicensed sports betting.U.S. Court of Appeals for the Sixth CircuitCoinDesk
- The CFTC filed an amicus brief supporting the state regulators; the court also cited CFTC statements that sports contracts lack a bona fide cash market.U.S. Court of Appeals for the Sixth Circuit
Sources4 articles across 4 outlets
CoinDesk
Courthouse News Service
U.S. Court of Appeals for the Sixth Circuit
Unchained
Filed under
Court orderU.S.OhioTenn.6th Cir.Financial servicesLitigationRegulatoryFor practitionersFor governance