Kalshi Faces Legal Setback as Appeals Court Approves State Regulation

The 6th U.S. Circuit Court of Appeals ruled that states can regulate sports-related event contracts on prediction market platforms. This marks a significant legal defeat for Kalshi as it permits Ohio and Tennessee to enforce state gambling laws on its operations. The court stated that Kalshi has not demonstrated that its sports-event contracts qualify as 'swaps' under the Commodity Exchange Act. This ruling complicates Kalshi's efforts to operate federally without state interference, which is essential for market stability for platforms like Kalshi.

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