Kalshi loses appellate challenge to Ohio and Tennessee sports betting restrictions, creating a widening circuit split on prediction market regulation.
Regulation & Gov ·
A federal appeals court has ruled against Kalshi in a challenge to sports betting restrictions in Ohio and Tennessee, according to a decision by a unanimous panel. The court cited Kalshi's own earlier acknowledgment that its sports event contracts lack "inherent economic significance" as a basis for upholding the state laws. The loss marks Kalshi's third decision across different circuit courts, with the platform now unsuccessful in one appellate ruling while maintaining wins in others.
The dispute centers on whether prediction markets—specifically Kalshi's sports event contracts—fall within federal regulatory authority or remain subject to state gambling prohibitions. The ruling deepens existing disagreement among federal circuits over how to classify and regulate such products, with different courts reaching conflicting conclusions on the same or similar legal questions.
The widening circuit split leaves unresolved which courts' interpretation will ultimately prevail absent further action. Kalshi's track record across jurisdictions suggests the legal question remains contested, and the outcome could hinge on whether the issue reaches the Supreme Court or Congress acts to clarify federal oversight of prediction markets.