Kalshi Loses Ohio and Tennessee Cases at Sixth Circuit
Kalshi’s court fight with Ohio and Tennessee moved against the company on September 25. The Sixth Circuit rejected its bid for preliminary protection in both states. Ohio can continue with enforcement while the Tennessee case goes back to the district court without the injunction Kalshi had secured earlier.
At issue are Kalshi contracts tied to sports events. The company says those products fall under federal commodities regulation and the Commodity Futures Trading Commission, rather than state sports-betting laws.
A three-judge Sixth Circuit panel was not persuaded. In its opinion, the court said Kalshi had not established that the contracts were swaps. The judges also considered the alternative: even if they were swaps, the Commodity Exchange Act would not by itself shut Ohio and Tennessee out.
That was enough to leave Kalshi without preliminary relief.
Tennessee Ruling Changes the Position on the Ground
Ohio and Tennessee arrived at the appeal from different starting points. Kalshi had already lost its injunction request in Ohio.
Tennessee was different. There, a federal district court had temporarily stopped state officials from applying sports-wagering rules to Kalshi while the case moved forward.
That order is now gone. The Sixth Circuit vacated it and returned the dispute to the lower court.
Tennessee’s position has been that sports contracts covering game results, spreads and player performance amount to sports wagering under state law. The attorney general described the state’s case in a May court filing announcement.
No final judgment on Kalshi’s underlying liability was issued on September 25. The immediate change is narrower: the company no longer has the Tennessee injunction.
Federal Appeals Courts Are Now Split 2-1
The Ohio-Tennessee ruling also adds another entry to a growing set of federal appeals decisions involving Kalshi. There are now three:
- The Third Circuit sided with Kalshi in the New Jersey dispute in April.
- Nevada went the other way. The Ninth Circuit rejected Kalshi’s preemption argument in August.
- The Sixth Circuit has now done the same in the Ohio and Tennessee cases.
So far, the appellate record is 2-1 against Kalshi’s argument that federal commodities law blocks this type of state gambling enforcement. Maryland could change that count again. Its dispute is still before the Fourth Circuit.
The Sixth Circuit noted the existing disagreement between the courts in its own ruling.
Ohio’s $5M Penalty Notice Remains in Play
Ohio’s dispute also carries a direct financial exposure. The Ohio Casino Control Commission previously issued a notice seeking a $5 million civil penalty over what it alleges was unlicensed sports-gaming activity. 15M covered the notice when it was issued.
Kalshi then tried to stop Ohio officials in federal court. That attempt failed at district court and has now failed again on appeal.
The Tennessee result is slightly different but more immediate. Kalshi went into the Sixth Circuit with an injunction there and came out without one. The underlying litigation in both states continues.