Kalshi has asked the full US Court of Appeals for the Sixth Circuit to rehear its 25 September loss to Ohio and Tennessee, a ruling that lets both states apply their gambling laws to its sports event contracts. The petition, filed on 9 October, comes as the Supreme Court weighs New Jersey’s request to settle the question nationally.
The 25 September ruling
A unanimous three-judge panel held that Kalshi had not shown its sports event contracts meet the statutory definition of a swap, which would place them under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC). In the alternative, the panel said the Commodity Exchange Act (CEA) does not preempt Ohio’s or Tennessee’s gambling laws, expressly or impliedly, according to the Sixth Circuit opinion.
The decision upheld a federal judge’s refusal to grant Kalshi a preliminary injunction against Ohio regulators and vacated the injunction Kalshi had won against Tennessee officials in February. The panel found that sports contracts lack the inherent financial or economic consequences a swap requires.
Kalshi’s sports event contracts have only downstream economic consequences, assuming they have the potential to cause economic consequences at all.
Julia Smith Gibbons, Circuit Judge, US Court of Appeals for the Sixth Circuit
Tennessee Attorney General Jonathan Skrmetti called the outcome “a great win for Tennessee”, Courthouse News Service reported. A Kalshi spokesperson told The Hill that the company disagreed with the decision and did not expect it to survive further review.
Ohio moves to enforce
Ohio Governor Mike DeWine said on 2 October that the state would enforce its law against Kalshi, describing sports prediction markets as illegal gambling, according to the Statehouse News Bureau. The same report said the Ohio Casino Control Commission fined Kalshi $5m in April for operating unlicensed sports gaming, after telling it to stop or apply for a licence and pay Ohio’s 20% sports betting tax.
We think that they should have to abide by the same rules that everybody else has to abide by.
Mike DeWine, Governor, State of Ohio
Kalshi added sports contracts in 2025 and sued the Ohio Casino Control Commission and state officials in October 2025, the Statehouse News Bureau reported.
Rehearing petition and circuit split
Kalshi’s petition argues that the panel broke with other circuits and misread the CEA on both preemption and the swap definition, according to Wolters Kluwer’s VitalLaw. It also points to a CFTC interim final rule, issued partly in response to the panel’s decision, which states that a swap does not include non-traded contracts regulated as gambling under state or tribal law. Kalshi says the new rules undermine the panel’s reasoning. TGE reported in September that Kalshi’s chief executive expected a new CFTC rule after an earlier court loss.
Full-court rehearings are rarely granted. Ohio can already enforce its law, while the Tennessee injunction stays in place until the Sixth Circuit issues its mandate, which the pending petition delays.
The appeals courts are divided. The Third Circuit ruled 2-1 for Kalshi in New Jersey on 6 April 2026, and the Ninth Circuit ruled against it in Nevada on 28 August, according to DeFi Rate’s litigation tracker. Cases involving Maryland in the Fourth Circuit and New York and Connecticut in the Second Circuit are still pending. Twenty states are in active litigation over prediction markets, and 44 states signed a letter to the CFTC in July disputing its authority over sports event contracts, The Hill reported.
New Jersey asked the Supreme Court on 2 September to review the Third Circuit decision, according to the Supreme Court docket for No. 26-299. The NFL, the American Gaming Association, 145 tribes and tribal organisations, former CFTC Chairman Gary Gensler and former Senator Christopher Dodd are among the amici backing the petition, as TGE reported on 12 October.
Tarek Mansour, Kalshi’s co-founder and chief executive, told Reuters on 21 October that the dispute could end up at the Supreme Court and that the company was very confident in its legal position. He declined to comment on Kalshi’s chances if the court takes the case.
Next steps
Kalshi’s response to New Jersey’s petition is due at the Supreme Court on 9 November, after which the justices decide whether to hear the case. In the Second Circuit, New York’s answering brief is due on 30 October. The Sixth Circuit has set no date for a decision on the rehearing petition. TGE follows the cases in its prediction markets archive.
Source: US Court of Appeals for the Sixth Circuit
