Kalshi Loses Sixth Circuit Appeal, Faces State Bans
A unanimous ruling lets Ohio and Tennessee enforce sports betting laws against the prediction market platform.
A unanimous Sixth Circuit panel ruled against Kalshi on September 26, 2026, allowing Ohio and Tennessee to enforce their state sports betting laws against the prediction market operator.
Why It Matters
This ruling hands state regulators a concrete legal weapon against Kalshi's core business model, which hinges on federal Commodity Futures Trading Commission (CFTC) preemption of state gambling laws. A second federal appeals court rejecting that preemption argument — following an earlier adverse ruling — signals that Kalshi's legal strategy is losing ground at the appellate level. For bettors in Ohio and Tennessee, this likely means Kalshi's sports-event contracts face imminent suspension or removal in those states. Operators and investors watching the prediction markets space should treat this as a material risk indicator, not a procedural speed bump.
Context
Kalshi operates prediction markets on events including sports outcomes, arguing its CFTC-registered status shields it from state-level gambling regulation (per Legal Sports Report). States including Ohio and Tennessee contend those contracts constitute unlicensed sports betting under their existing statutes. This is now at least the sixth appellate setback for Kalshi, suggesting the federal preemption theory it relies on has failed to persuade multiple independent judicial panels.
What's Next
Ohio and Tennessee regulators can now move to enforce their sports betting statutes against Kalshi without waiting for further court action. The company's remaining options include a petition for en banc rehearing or an appeal to the U.S. Supreme Court — both long-odds paths. Gambling carries financial risk; users on any prediction market platform should monitor regulatory status in their state before placing contracts.
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