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Appeals court says Ohio and Tennessee can regulate Kalshi under gambling laws
Mashable • • business
Key Points:
- A three-judge panel of the 6th U.S. Circuit Court of Appeals ruled that Ohio and Tennessee can apply their gambling laws to Kalshi's event contracts, rejecting Kalshi's argument that its contracts are financial "swaps" regulated exclusively by the CFTC.
- Circuit Judge Julia Smith Gibbons stated that swaps are financial instruments for hedging risk, not gaming contracts, and emphasized that state gambling regulation is a core police power not overridden by federal law.
- The ruling overturned a preliminary injunction preventing Tennessee from enforcing its gambling laws against Kalshi and upheld a similar decision in Ohio; Tennessee's Attorney General praised the outcome, while Kalshi plans to appeal.
- This unanimous decision highlights a growing split among federal appeals courts regarding whether states or the CFTC regulate prediction markets, increasing the likelihood of Supreme Court involvement in the future.
- Similar legal battles over prediction market regulation are ongoing in multiple states, including Connecticut, New York, Arizona, and Minnesota.
