Appeals court rules against Kalshi, says prediction markets can be regulated like gambling
The 6th U.S. Circuit Court of Appeals ruled that states can regulate prediction markets like Kalshi as gambling, deepening a legal split likely headed to the Supreme Court.Summary
The 6th U.S. Circuit Court of Appeals ruled unanimously against the prediction market Kalshi, finding that states can regulate prediction market platforms like gambling. The three-judge panel sided with Ohio and Tennessee, determining Kalshi did not show its sports-event contracts are "swaps" under the jurisdiction of the Commodity Futures Trading Commission, and that the Commodity Exchange Act does not preempt state gambling laws. The ruling, which consolidated lawsuits in both states, follows a similar 9th Circuit decision last month, but conflicts with the 3rd Circuit's April ruling that allowed Kalshi to operate in New Jersey while its appeal proceeds. These conflicting rulings are teeing up a likely fight in the U.S. Supreme Court, and New Jersey has already urged the justices to settle how prediction markets should be regulated. Twenty states are in active litigation over the issue, while President Trump has backed the CFTC having exclusive authority. A Kalshi spokesperson said the company disagrees with the decision, arguing that markets cannot operate under a state-by-state patchwork and that Congress created a single federal regulator for this reason.
(Source：The Hill)