Sixth Circuit allows Ohio and Tennessee to enforce gambling laws

Sixth Circuit clears Ohio and Tennessee to enforce gambling laws against Kalshi

Americans wagered $166.94 billion through legal sportsbooks in 2025, generating $3.71 billion in state tax revenue. A growing share of that volume is now moving to platforms that states cannot tax, and on September 28, 2026, a unanimous Sixth Circuit panel gave Ohio and Tennessee the authority to pursue enforcement against Kalshi directly.

The ruling followed a Ninth Circuit decision on August 28, 2026 that similarly rejected Kalshi's preemption argument in a Nevada dispute. The Third Circuit had previously ruled in Kalshi's favor on the same question in a New Jersey case. Three federal appeals courts have now produced two different answers to the same legal question: whether federal commodities law, under which Kalshi operates as a designated contract market overseen by the CFTC, displaces state authority to enforce gambling statutes against sports event contracts.

Kalshi's position is that its contracts are swaps, not bets. State regulators read the same instrument and see sports wagering with a different label. The Sixth Circuit's unanimity on September 28 strengthens the hand of every state that has been watching from the enforcement sideline.