What's happened
The 6th U.S. Circuit Court of Appeals has ruled that Ohio and Tennessee can regulate sports-related event contracts. States’ gambling laws apply, undermining the argument for federal exclusivity over prediction markets. The decision follows earlier rulings in the 9th and 3rd Circuits and comes as the Supreme Court may weigh in. New York has sued Polymarket over unlicensed gambling.
What's behind the headline?
The stakes are high for enforcement and access to prediction markets
- The 6th Circuit endorses state gambling regulation, which could limit federal reach and affect operators like Kalshi.
- The divergence among circuits likely prompts renewed Supreme Court consideration, potentially harmonizing federal vs. state oversight.
- The rulings may push platforms to refile under state regimes, impacting users who access these markets across state lines.
What this means for readers
- If state laws prevail, users may face different rules depending on location, especially for sports-related contracts.
- Regulators could require licensing or restrict access in states with stricter gambling laws, changing the economics of prediction markets.
How we got here
The story builds on recent court decisions about how prediction markets are regulated in the U.S. The 6th Circuit’s ruling aligns with Ohio and Tennessee’s view that state gambling laws can govern event contracts on Kalshi and similar markets. This adds to a circuit court patchwork shaping how federal and state regulators oversee these platforms.
Our analysis
Al Jazeera reports Friday’s ruling on state regulation of Kalshi’s event contracts; CNBC notes the 6th Circuit decision and its implications for the CFTC’s exclusive jurisdiction; New York Post reports on the same 6th Circuit decision with a brief update.
Go deeper
- Will users in states with stricter gambling laws be blocked from Kalshi?
- How might the Supreme Court respond to the circuit split on swaps vs gambling?
- What does this mean for the broader growth of prediction markets in the U.S.?
More on these topics
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Ohio - US State
Ohio is a state in the East North Central region of the Midwestern United States. Of the fifty states, it is the 34th largest by area, the seventh most populous, and the tenth most densely populated. The state's capital and largest city is Columbus.
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Tennessee - US State
Tennessee, officially the State of Tennessee, is a state in the southeastern United States. Tennessee is the 36th largest by area and the 16th most populous of the 50 states.
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Kalshi - American prediction market platform
Kalshi Inc. is a prediction market platform based in Manhattan, New York City, that launched in July 2021. The platform is used primarily for sports betting, which constitutes more than 90% of site activity and 89% of revenue in 2025. Analysts describe activity on the platform as "heavily tied to the sports calendar". Individuals can place bets on other future outcomes, including economic indicators, weather patterns, awards, political and legislative outcomes, and military conflicts. The site has been involved in several controversies and lawsuits regarding the legality of its sports and election markets, the ethics of allowing wagers on sensitive geopolitical issues, and insider trading involving politicians. Concerns over election integrity and declining public trust in the democratic process caused by election betting have been raised by consumer advocacy groups and politicians. As a result, the United States Senate banned its senators and their staff from betting on prediction markets such as Kalshi in May 2026. According to the site, there are 2.9 unprofitable users for each profitable one. John M. Sides has challenged whether Kalshi efficiently and accurately aggregates information...
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New Jersey - US State
New Jersey is a state in the Mid-Atlantic region of the Northeastern United States. It is bordered on the north and east by the state of New York; on the east, southeast, and south by the Atlantic Ocean; on the west by the Delaware River and Pennsylvania;
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New York - US State
New York is a state in the Northeastern United States. New York was one of the original thirteen colonies that formed the United States. With more than 19 million residents in 2019, it is the fourth-most-populous state.