Sixth Circuit lets Ohio and Tennessee enforce sports-gambling laws against Kalshi

Tennessee can enforce its sports-gambling laws against Kalshi again, and an earlier Sixth Circuit panel had already let Ohio keep enforcing in April. Friday's ruling is temporary, so the lawsuits continue and the sports contracts stay listed.

Attorney General Jonathan Skrmetti said on May 26 that Tennessee law requires a license, consumer protections and taxes, and that FanDuel, DraftKings and BetMGM already offer the same kinds of products under those rules. "Kalshi can call their bets 'swaps' all they want, but everyone who so much as glances at the platform understands that this is sports gambling," he said.

New Jersey Attorney General Jennifer Davenport asked the Supreme Court on September 2 to throw out an order that still stops her state from enforcing. "Companies like Kalshi claim to offer legal sports betting in all 50 States, but they refuse to follow the gambling laws of any State," she said. Kalshi spokeswoman Dani Lever answered the same day, calling the company "an open, nationwide financial exchange" that "cannot be regulated by 50 different regulators." New Jersey's petition says 95% of Kalshi's 2025 revenue came from sports-related betting, and counts at least 39 lawsuits across 20 states.

Kalshi runs a market where people trade contracts that pay if an event happens, including the result of a game. The company is registered with the Commodity Futures Trading Commission, the U.S. agency that oversees futures trading. It says a sports contract is a swap, the Commodity Exchange Act's word for a contract tied to an event "with a potential financial, economic, or commercial consequence," and that only the agency may regulate one. Ohio and Tennessee say a contract on a game is a sports bet. Ohio's casino commission told Kalshi in March 2025 to stop offering sports contracts in the state. Senior Judge Julia Smith Gibbons wrote Friday's opinion, joined by Judges Eric L. Clay and Rachel S. Bloomekatz.

On May 12 the agency asked the Sixth Circuit to reverse the Ohio decision. Chairman Michael S. Selig said the trial court "took an improperly narrow view of the Commission's jurisdiction, and we are asking the Court of Appeals to correct that error." The agency said the brief explains how federal law gives it sole control of these markets and overrides state rules on them. On April 2 it sued Arizona, Connecticut and Illinois, challenging those states' actions against registered exchanges. Friday's opinion left standing the Ohio decision the agency had asked the court to undo.

Robinhood is the public company that reports this business in its results. It reported $156 million of event-contract revenue in the second quarter, more than ten times what it was a year earlier. That figure includes $17 million from Rothera, an exchange launched in June through Robinhood's joint venture with Susquehanna International Group. The company also routes contracts to Kalshi. Chairman and Chief Executive Officer Vlad Tenev said on CNBC on September 20, "We're already seeing other categories like crypto taking a disproportionate share. And I think within a few years, sports will actually be in the minority." On September 10, Robinhood Derivatives filed its own petition with the Supreme Court in a Ninth Circuit case over the company's sports contracts.

The appeals courts are divided. On August 28 the Ninth Circuit said Kalshi had not shown that federal commodities law stops Nevada from applying its gaming rules to the sports contracts, and it lifted the order that had protected those contracts. The Third Circuit has kept an order that stops New Jersey from enforcing its gambling laws against Kalshi. Friday adds the Sixth Circuit to that split. The Supreme Court has not agreed to hear New Jersey's case.