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- Nevada Attorney General Aaron Ford is publicly applauding the U.S. Sixth Circuit Court of Appeals‘ recent decision against Kalshi as a massive victory for state regulators, after the court ruled that the company’s sports-event contracts are not shielded from state gambling laws by federal commodities oversight.
- Nevada, which recently led a multistate friend-of-the-court brief in the dispute, argues that Kalshi‘s federally regulated event contracts are functionally unlicensed sports wagers, reinforcing the precedent that platforms cannot bypass established state gaming laws simply by renaming their betting products.
A federal appeals court has ruled against Kalshi, with the Sixth Circuit U.S. Court of Appeals holding that the company’s sports-event contracts are subject to state gaming laws.
The decision is significant because it cuts against Kalshi’s argument that its contracts should avoid state gambling oversight under federal commodities law. The ruling also adds to recent court support for state authority over sports wagering, coming less than a month after the Ninth Circuit affirmed Nevada’s right to regulate sports betting in a separate case.
Court rejects Kalshi’s federal-law argument
According to the ruling summarized by 8 News Now, the Sixth Circuit rejected Kalshi’s position that the sports-event contracts were outside the reach of state gaming laws. The court said the contracts are not “swaps” under federal commodities law.
The court also said that even if the contracts were considered swaps, federal law would not override state gaming laws. In practical terms, that means states can continue trying to enforce their own gambling rules against the company’s sports-event offerings—highlighting how intense regulatory friction is shaping the future of every active prediction market operating across state lines.
The Sixth Circuit’s decision upheld an Ohio court ruling that denied Kalshi a preliminary injunction. It also overturned a Tennessee court decision that had blocked the state from enforcing its laws against Kalshi.
States argue the contracts are simply sports bets
The dispute has drawn support from multiple states, with Nevada leading a multistate friend-of-the-court brief backing state authority to regulate sports betting and enforce gaming laws. Nevada has argued that Kalshi’s sports-event contracts are, in substance, sports bets and should be treated that way under state law.
Nevada Attorney General Aaron Ford called the ruling “another important win for states’ ability to regulate gaming and protect consumers.” He added: “Companies should not be able to avoid state gaming laws simply by calling sports wagers something else. Nevada was proud to lead states in defending this authority.”
The source article says Kalshi has not taken steps to become licensed in the states where it operates. It also says states have lost significant revenue as legal sports gambling expanded while vendors such as Kalshi allegedly avoided regulation.
What to watch next
The ruling adds another appellate loss for Kalshi as courts weigh whether sports-event contracts fall under federal market rules or state gambling law. The source article does not say whether Kalshi plans to appeal further.
For now, the latest decision strengthens the position of states such as Ohio, Tennessee, and Nevada that sports-event contracts tied to game outcomes can be regulated under state gaming frameworks.
Source: As reported by Greg Haas.
