Kalshi Seeks Full Sixth Circuit Review of Prediction Market Regulation Ruling

Prediction market operator Kalshi has requested a full Sixth Circuit review of a ruling that upheld state oversight of its sports contracts. This action follows a September 25 decision affirming the right of Ohio and Tennessee regulators to enforce gambling laws.

What Happened

Kalshi has petitioned the full Sixth Circuit to reconsider a ruling that favored Ohio and Tennessee sports regulators, as reported by CoinGape. The company’s court filing challenges a September 25 decision which permitted states to enforce gambling statutes regarding prediction markets. The three-judge panel in that September decision concluded that Kalshi had not demonstrated its sports contracts qualified as swaps. The panel determined that if these contracts were indeed swaps, federal commodities law would not necessarily override state gambling regulations, according to CoinGape.

As a direct consequence, the court upheld Ohio’s denial of an injunction and removed an injunction previously in place against Tennessee regulators. The Ohio Casino Control Commission had prohibited Kalshi from offering sports contracts in March 2025. Subsequently, in January 2026, Tennessee’s Sports Wagering Council issued a similar request. Kalshi’s legal team contends that Congress granted the Commodity Futures Trading Commission (CFTC) “exclusive jurisdiction” over contracts traded on designated exchanges and asserts that the Sixth Circuit’s decision is inconsistent with other federal appeals court rulings and its own established law, CoinGape reported.

Key Details

• Kalshi challenges the Sixth Circuit’s September 25 ruling, which affirmed state authority over sports contracts, according to CoinGape.
• The Commodity Futures Trading Commission (CFTC) proposed on October 9 to include event contracts, encompassing sports, politics, cultural events, and weather, within the federal swap definition, CoinGape stated.
• The CFTC issued an interim final rule to exclude casino gambling and sportsbook wagers from the swap definition, which is set to take effect upon publication in the Federal Register, as reported by CoinGape.
• Kalshi cited both the CFTC’s proposed new rules and its interim final rule as grounds for a new hearing, distinguishing exchange-traded event contracts from those with standard bookmakers, CoinGape reported.
• Conflicting rulings exist across federal appeals courts; the Third Circuit ruled in favor of Kalshi in New Jersey, while the Ninth Circuit favored Nevada regulators, according to CoinGape.

Why It Matters

The ongoing legal disputes underscore the regulatory uncertainty surrounding prediction markets, particularly their classification as either financial instruments or gambling activities. The varying interpretations across federal appeals courts, such as the conflicting outcomes in New Jersey and Nevada, highlight a lack of consistent legal precedent regarding the jurisdiction over these products, CoinGape reported. The CFTC’s recent proposals, which seek to define event contracts as “commodity derivatives” and distinguish them from traditional casino and sportsbook wagers, could provide a more definitive regulatory framework. This could have significant implications for the operational scope of prediction market platforms and the regulatory oversight bodies involved, as noted by CoinGape.

What’s Next

Kalshi is required to respond to New Jersey’s Supreme Court petition by November 9, according to the court docket referenced by CoinGape. The CFTC’s proposal regarding event contracts will be open for public comment within 30 days of its publication in the Federal Register. Additionally, New Jersey authorities are seeking a review by the US Supreme Court regarding the Third Circuit’s decision that favored Kalshi, and the NFL filed with the Supreme Court on October 8, advocating for intervention in sports prediction market regulation, CoinGape reported.

Originally reported by CoinGape·Published 13 Oct 2026, 18:49