CINCINNATI — The 6th U.S. Circuit Court of Appeals has ruled that Ohio and Tennessee can apply their gambling laws to Kalshi, the prediction market that lets users trade on the outcomes of events including sports.
The ruling, which deepens a split among federal courts on how prediction markets should be regulated, could ultimately push the question to the U.S. Supreme Court. Kalshi has argued that its event contracts are financial instruments regulated at the federal level, not gambling subject to state law.
The Tennessee side of the ruling is particularly notable because Kalshi had previously won there. In January 2026, after Tennessee regulators ordered Kalshi to stop offering sports-event contracts, U.S. District Judge Aleta Trauger issued a temporary restraining order shielding the company from Tennessee enforcement, saying Kalshi was likely to succeed on its claims. That victory has now been overturned on appeal.
The 6th Circuit’s decision means state regulators in Ohio can treat Kalshi’s offerings — including sports-event contracts that function much like wagers — under state gambling statutes.
The fight over prediction markets has become one of the hottest legal battlegrounds in gaming, with states and the federal government clashing over who gets to regulate a fast-growing industry. With courts now split, the issue looks headed for a definitive answer from the nation’s highest court.