Kalshi loses appeal, setting up potential Supreme Court case
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Summary
The 6th US Circuit Court of Appeals ruled against prediction market Kalshi, siding with Ohio and Tennessee in allowing these states to regulate Kalshi’s sports-event contracts under their gambling laws. The court found that Kalshi did not prove its contracts qualify as "swaps" under the Commodity Futures Trading Commission's (CFTC) jurisdiction. This follows a conflicting ruling from the 3rd Circuit Court of Appeals in April and a similar 9th Circuit ruling last month, setting up a possible Supreme Court case.
Why it matters
The ruling highlights ongoing legal uncertainty over whether prediction markets like Kalshi are regulated by state gambling laws or federal entities such as the CFTC. The case could influence regulatory authority over prediction markets nationwide if the Supreme Court decides to resolve the jurisdictional dispute.
Key context
Previously, the 3rd Circuit allowed Kalshi to operate in New Jersey, suggesting federal law preempts state regulation. Contrasting rulings through different appellate courts have created conflicting legal interpretations, prompting state lawmakers to file an amicus brief urging Supreme Court intervention. The core issue is whether Kalshi’s contracts are "swaps" under federal jurisdiction or subject to state gambling laws.
Key numbers and entities
The 6th US Circuit Court of Appeals ruled against Kalshi. The states involved are Ohio and Tennessee. The Commodity Futures Trading Commission (CFTC) is the federal regulator referenced. The 3rd and 9th Circuit Courts of Appeals have issued differing decisions related to Kalshi. A group of state lawmakers has filed an amicus brief with the Supreme Court.
What remains unclear
The Supreme Court has not yet decided whether to take the case. The broader implications for how prediction markets will be regulated nationally remain unresolved until higher courts provide clarity. The specific next steps for Kalshi’s operations following the 6th Circuit ruling are unknown.