Sixth Circuit rules Kalshi sports contracts are not swaps, siding with Ohio, Tennessee
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What happened
On Friday, September 25, 2026, the U.S. Court of Appeals for the Sixth Circuit ruled that Kalshi's sports event contracts are not swaps under federal commodities law and do not prevent Ohio and Tennessee from enforcing their sports betting laws, SBC Americas reported. The opinion was unanimous and combined Kalshi's cases against Ohio and Tennessee regulators. The court affirmed the Southern District of Ohio's denial of Kalshi's request for a preliminary injunction and vacated a Middle District of Tennessee order that had granted Kalshi preliminary relief against Tennessee's regulation.
Judge Julia Smith Gibbons wrote for the panel that the contracts have only downstream economic consequences, so they are not associated with potential financial, economic or commercial consequences. SBC Americas described the ruling as the second federal appellate decision to favor state gaming regulators on Kalshi's federal preemption argument, after the Ninth Circuit's August ruling in a Nevada case. It said the Third Circuit had taken the opposite view in a New Jersey case, that New Jersey had petitioned the Supreme Court to review it, and that an appeal remained active in the Fourth Circuit.
Key points
- The Sixth Circuit unanimously held on September 25, 2026 that Kalshi's sports event contracts are not swaps under the Commodity Exchange Act.1
- Ohio and Tennessee may enforce their sports betting laws; the court affirmed Ohio's injunction denial and vacated Tennessee's order for Kalshi.1
- Judge Julia Smith Gibbons wrote that the contracts have only downstream economic consequences.1
- It was the second federal appellate ruling for state regulators, after the Ninth Circuit's August ruling in a Nevada case; the Third Circuit took the opposite view.1
- New Jersey had petitioned the Supreme Court to review the Third Circuit decision, SBC Americas said.1
Why it matters
In Ohio and Tennessee, the ruling leaves Kalshi's sports contracts subject to state betting laws, which bears on where the product can operate. The source does not say how much of Kalshi's activity is in sports contracts.
Appeals courts are divided: the Third Circuit sided with Kalshi, the Sixth and Ninth with state regulators. With a New Jersey petition before the Supreme Court, the legal status of the contracts depends on the circuit.
SBC Americas noted that the Ohio Casino Control Commission had sent Kalshi a cease-and-desist letter and pursued a separate $5m fine, and that Tennessee's Sports Wagering Council had also sent one.
In context
| Round | Date | Post-money valuation | Raised | Led by |
|---|---|---|---|---|
| Series C | Jun 25, 2025 | $2.0B | $185M | Paradigm |
| Series D | Oct 10, 2025 | $5.0B | $300M | Andreessen Horowitz and Sequoia Capital |
| Series E | Dec 2, 2025 | $11B | $1.0B | Paradigm |
| Series F | May 7, 2026 | $22B | $1.0B | Coatue |
| Series F extension | May 20, 2026 | $22B | $200M | Unknown |
Updated
Fact-check
- The Sixth Circuit unanimously held on September 25, 2026 that Kalshi's sports event contracts are not swaps under federal commodities law.Rests on the writer's read of [1] SBC Americas, which returned 403 to me; our research data records the same holding from this report.Partly verified
- The court affirmed the Southern District of Ohio's denial of a preliminary injunction and vacated a Middle District of Tennessee order.Rests on the writer's read of [1] SBC Americas, which was blocked for me.Partly verified
- Judge Julia Smith Gibbons wrote for the panel.Rests on the writer's read of [1] SBC Americas, which was blocked for me.Partly verified
- The Ninth Circuit reached a similar conclusion in August in a Nevada case, and the Third Circuit took the opposite view in a New Jersey case.Rests on the writer's read of [1] SBC Americas, which was blocked for me.Partly verified
- New Jersey petitioned the Supreme Court to review the Third Circuit decision, and an appeal remained active in the Fourth Circuit.Rests on the writer's read of [1] SBC Americas, which was blocked for me.Partly verified
- Ohio's commission sent a cease-and-desist letter and pursued a separate $5m fine against Kalshi.Rests on the writer's read of [1] SBC Americas, which was blocked for me; the writer notes the report does not say whether the fine was imposed.Partly verified
Sources
- [1]SBC Americas (opens in a new tab)Kalshi loses again as Sixth Circuit sides with Ohio, Tennessee
