US appeals court backs Ohio and Tennessee regulation of Kalshi contracts
A ruling by the 6th Circuit adds to differing appeals court decisions on whether states can apply gambling laws to prediction markets.
The 6th US Circuit Court of Appeals has ruled that Ohio and Tennessee may regulate Kalshi’s event contracts under state gambling laws, rejecting the company’s bid to have them exempted. The unanimous three-judge panel issued its decision on Friday.
The ruling adds to differing decisions among federal appeals courts over state authority. The 9th Circuit ruled last month that Kalshi contracts are subject to Nevada gambling laws; in April, the 3rd Circuit found they were not subject to New Jersey’s.
Those rulings concern different state laws, but the divide could prompt the US Supreme Court to consider the question. No Supreme Court review is scheduled.
Prediction markets allow users to bet on outcomes ranging from sports and elections to cultural events. Experts have raised concerns about their growth and betting apps, particularly for young people.
Separately, New York filed a lawsuit against Polymarket on Thursday, alleging it operates as unlicensed gambling. The company said it would fight for its users.
