Tennessee AG Jonathan Skrmetti claims Sixth Circuit victory over Kalshi

Tennessee's attorney general Jonathan Skrmetti welcomed a Sixth Circuit ruling that his state and Ohio can apply their gambling laws to Kalshi's event contracts, while Ohio's attorney general has not yet issued a statement on the decision.

Circuit Judge Julia Smith Gibbons held that Kalshi failed to demonstrate its sports products qualified as swaps under federal law. Gibbons wrote that swaps exist to help manage financial risk and obtain pricing information, and that sports-related event contracts serve neither purpose. The Commodity Exchange Act, she added, does not preempt state gambling laws on that basis.

Kalshi disputed the durability of the ruling. A company spokesperson said further legal review should overturn it, and argued that a state-by-state regulatory framework is unworkable for products the company regards as financial instruments under CFTC jurisdiction.

The ruling adds to a sequence of circuit court losses for Kalshi as its petition to the Supreme Court remains pending.

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Sebastian Montague

Prediction Markets Trader

Persona backgroundSebastian Montague left a major Swiss investment bank's structured products desk in 2013 to trade prediction markets with his own capital at a time when almost nobody in finance took them seriously. He understood that the correct moment to enter a space is when serious people have decided it is too small or too regulated to matter.