Kalshi’s Legal Setback Over Sports-Event Contracts
- The 6th US Circuit Court of Appeals ruled against Kalshi, allowing Ohio and Tennessee to regulate its sports-event contracts as gambling.
- A unanimous three-judge panel determined that Kalshi’s contracts do not qualify as “swaps” under the jurisdiction of the Commodity Futures Trading Commission (CFTC).
- This ruling follows a similar decision from the 9th Circuit Court of Appeals last month.
- An earlier ruling by the 3rd Circuit Court of Appeals permitted Kalshi to operate in New Jersey while its appeal is pending.
- State lawmakers have filed an amicus brief with the Supreme Court, urging it to clarify jurisdiction over prediction market companies.
The recent ruling reinforces state authority over sports betting regulations, impacting how prediction markets like Kalshi operate across different states. This case could set a significant precedent regarding federal versus state jurisdiction in the gaming sector.
Kalshi’s inability to prove its contracts are “swaps” under CFTC jurisdiction highlights ongoing regulatory challenges, particularly following recent rulings from multiple circuit courts. (Source)
