Kalshi Seeks Full Sixth Circuit Review of Prediction Market Regulation Ruling

Kalshi has asked the full Sixth Circuit to reconsider a ruling favoring Ohio and Tennessee sports regulators. Kalshi’s court petition challenges the September 25 decision allowing states to enforce gambling laws.

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Kalshi Challenges The Sixth Circuit’s Sports Contracts Ruling

In its September decision, the three-judge panel found that Kalshi had not established its sports contracts as swaps. The judges determined that if those contracts qualified, then federal commodities law would not take precedence over state gambling laws.

As a result, the court affirmed Ohio’s injunction denial and lifted an injunction against Tennessee regulators. In March 2025, the Ohio Casino Control Commission banned Kalshi from making sports contracts. In January 2026, Tennessee’s Sports Wagering Council made a similar request.

Kalshi challenges both findings and asks the panel or the full appeals court to reconsider. Its lawyers argue that Congress gave the CFTC “exclusive jurisdiction” over contracts traded on designated exchanges. They also argue that the decision is inconsistent with other federal appeals court rulings and Sixth Circuit law.

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CFTC  Proposes New Rules For Prediction Markets

On October 9, the Commodity Futures Trading Commission proposed including event contracts within the federal swap definition. The agency said the contracts include sports, politics, cultural events and weather.

CFTC Chairman Michael Selig dubbed the products “commodity derivatives” under the authority of the commission. The regulator sought public comment on the proposal within 30 days after the proposal was published in the Federal Register.

Meanwhile, the CFTC issued an interim final rule excluding casino gambling and sportsbook wagers from the swap definition. According to the agency, the rule would go into effect upon publication in the Federal Register.

In its petition, Kalshi cited both actions as grounds for a new hearing. The company claims that there is a legal distinction between exchange-traded event contracts and those contracts placed with standard bookmakers. 

Other Court Disputes Remain Active

The court battle is not limited to Ohio and Tennessee, as appeals courts in both states have concluded in different ways.

In New Jersey, the Third Circuit ruled in favor of Kalshi, whereas the Ninth Circuit ruled in favor of Nevada regulators. Kalshi filed a separate request for full Ninth Circuit review in September, following its Nevada loss.

Meanwhile, New Jersey authorities are seeking review by the US Supreme Court of the Third Circuit decision. The NFL filed with the Supreme Court on Oct. 8 in favor of intervention for sports prediction market regulation. 

The conflicts are not limited to Kaslshi alone. In September, New York filed a lawsuit against Polymarket for allegedly running an illegal gambling operation.

The league said state gambling regulators provide better protection against sports betting integrity concerns. Kalshi must respond to New Jersey’s Supreme Court petition by November 9, according to the court docket.