Meta description: Ohio Gov. Mike DeWine said Kalshi’s sports contracts violate state gambling law after the Sixth Circuit let Ohio and Tennessee enforcement proceed.
Tags: Kalshi, Ohio Casino Control Commission, Mike DeWine, Sixth Circuit, Tennessee Sports Wagering Council, CFTC
market_platform: Kalshi
category: Regulation
Ohio Gov. Mike DeWine said Ohio will enforce its gambling laws against Kalshi after a U.S. Court of Appeals for the Sixth Circuit panel ruled on September 25, 2026, that Ohio and Tennessee can continue pursuing enforcement against the exchange’s sports event contracts.
DeWine, a Republican who has long opposed expanded gambling, told Ideastream Public Media that Kalshi’s sports contracts are illegal gambling dressed up as prediction markets. “These so-called prediction markets, which are really gambling, nothing more than that, they’re just trying to get around the law,” DeWine said, adding that Kalshi should “abide by the same rules that everybody else has to abide by.”
He used plainer language too. “If it’s a pig, it’s a pig. If we call that pig a sheep, it’s still not a sheep. It’s a pig. These guys are pigs,” DeWine said, according to Ideastream.
What did the Sixth Circuit decide about Kalshi’s sports contracts?
The Sixth Circuit held that Kalshi’s sports event contracts are not “swaps” under the Commodity Exchange Act and that the exchange was not entitled to preliminary injunctions blocking Ohio and Tennessee regulators. The September 25 opinion affirmed the Ohio district court’s denial of preliminary relief, reversed the Tennessee district court’s order granting Kalshi relief, and remanded both cases for further proceedings.
Judge Julia Smith Gibbons wrote the opinion, joined by Judges Eric Clay and Rachel Bloomekatz. The panel’s central conclusion was that sports event contracts do not fit the Commodity Exchange Act’s swap definition because the events are not intrinsically tied to financial, economic or commercial consequences.
“Kalshi’s sports-event contracts have only downstream economic consequences,” the Sixth Circuit wrote. That point mattered because Kalshi’s preemption argument depended on treating the contracts as federally regulated swaps within the Commodity Futures Trading Commission’s exclusive jurisdiction.
The court also rejected Kalshi’s backup argument that the Commodity Exchange Act would preempt Ohio and Tennessee gambling laws even if the contracts were swaps. The panel said the statute did not expressly or impliedly bar state enforcement in the posture before the court.
Why did Kalshi’s earlier statements matter?
The Sixth Circuit leaned heavily on Kalshi’s own descriptions of sports contracts. At oral argument, the court pressed the exchange on markets tied to corner kicks or broadcaster phrases. Kalshi acknowledged that it could be “hard to see” how some of those contracts carried economic consequences.
The panel also cited statements Kalshi made in its Nevada litigation, where the company said sports event contracts had “no inherent economic significance” and did not transfer economic risk in the way traditional financial derivatives do. The Sixth Circuit treated those statements as evidence against Kalshi’s claim that the contracts fall within the Commodity Exchange Act’s swap framework.
Kalshi also argued that state-by-state compliance would impose a heavy burden on a federally registered exchange. The Sixth Circuit was not persuaded. The court said geofencing may be costly, but cost alone did not make compliance impossible.
Kalshi spokesperson Dani Lever said after the ruling that “the law does not require a swap to involve ‘intrinsic’ financial consequences” and argued that the decision showed why “a state-by-state patchwork doesn’t work.” Tennessee Attorney General Jonathan Skrmetti called the ruling “a great win for Tennessee.”
What is Ohio trying to enforce against Kalshi?
Ohio’s dispute with Kalshi began after the exchange expanded into sports event contracts in 2025. The Ohio Casino Control Commission told Kalshi to stop offering sports markets in the state unless it obtained a sports gaming license and complied with Ohio gambling law, including the state’s 20% sports betting tax.
Kalshi sued the Ohio Casino Control Commission and state officials in federal court in October 2025, arguing that its contracts are federally regulated financial instruments and that Ohio’s sports gambling regime is preempted by federal commodities law. U.S. District Judge Sarah D. Morrison denied Kalshi’s request for a preliminary injunction in March 2026, and the Sixth Circuit affirmed that denial in its September 25 ruling.
The Ohio Casino Control Commission has also pursued a $5 million proposed penalty against Kalshi for alleged unlicensed sports gaming activity. Kalshi challenged that penalty in state court in June. Ohio regulators have separately said Kalshi does not meet state requirements that apply to licensed sportsbooks, including rules on self-exclusion programs and advertising.
The Sixth Circuit had already declined to stop Ohio enforcement on an emergency basis. On April 24, 2026, a panel refused to block the state while the appeal proceeded, called the legal issues “close,” and expedited the case. The September 25 decision resolved the preliminary-injunction appeal, but the underlying litigation still returns to the lower courts.
Where do other federal courts stand on sports event contracts?
The Sixth Circuit ruling adds to a growing appeals-court split over whether states can apply gambling laws to sports contracts listed by CFTC-regulated prediction-market exchanges. The Third Circuit ruled for Kalshi in its New Jersey dispute in April 2026. The Ninth Circuit ruled against Kalshi in its Nevada dispute on August 28, 2026.
The Ninth Circuit also issued a separate decision in Blue Lake Rancheria v. Kalshi involving California tribes. In that case, the court reversed in part after finding the tribes had shown a likelihood of success on their Indian Gaming Regulatory Act claim, affirmed against them on a Lanham Act theory, and remanded for the district court to consider the remaining preliminary-injunction factors.
A Fourth Circuit appeal in Kalshi’s Maryland litigation remains another part of the national fight. Together, the cases have left state regulators, tribal gaming interests, sports-betting operators and CFTC-regulated exchanges operating under different rulings depending on the circuit.
New Jersey has already asked the U.S. Supreme Court to take up the issue. In docket No. 26-299, filed September 2, 2026, the state asked the Court to decide whether the Commodity Exchange Act prevents states from enforcing gambling laws against sports event contracts offered on federally regulated exchanges.
What happens next for Kalshi and Ohio?
Kalshi can seek rehearing at the Sixth Circuit or ask the U.S. Supreme Court to review the Ohio and Tennessee rulings. In Ohio, the Casino Control Commission’s enforcement effort, including the proposed $5 million penalty, can continue without the preliminary federal injunction Kalshi sought.
The next fixed national deadline is November 9, 2026, when Kalshi’s response to New Jersey’s Supreme Court petition is due under the Court’s docket. If the justices take the case, the result could determine whether sports event contracts are governed mainly by federal commodities law, state gambling law, or some combination of both.
