Kalshi Petitions Sixth Circuit for Rehearing on Sports Contracts While CFTC Proposes Swap Rules

Kalshi has asked the full Sixth Circuit Court of Appeals to reconsider a September 25 panel ruling that lets Ohio and Tennessee pursue gambling-law enforcement against its sports event contracts. The October 9 petition argues federal commodities law assigns the CFTC exclusive authority over designated exchange products. CoinGape and Bloomberg Law reported the filing, per Casino Beats coverage. The dispute centers on whether swap status under CFTC rules displaces state gambling oversight.

Kalshi’s Position and the Panel Decision

The three-judge panel held that Kalshi failed to establish its sports contracts as swaps under federal commodities law. Even assuming they qualified, the panel found no preemption of state gambling rules. It affirmed denial of an Ohio injunction and lifted Tennessee’s injunction, allowing both states to proceed.

Ohio’s Casino Control Commission barred Kalshi sports contracts in March 2025. Tennessee’s Sports Wagering Council took parallel action in January 2026. Kalshi contends the panel ruling conflicts with other federal appellate decisions and Sixth Circuit precedent. Those arguments remain unaccepted by the court.

CFTC Moves and Multi-Circuit Risks

The CFTC proposed on October 9 to define event contracts on sports, politics, cultural events, and weather as swaps, open for 30-day public comment after Federal Register publication. An interim final rule excludes casino gambling and sportsbook wagers, effective upon publication. Kalshi cites both steps to stress the legal distinction between exchange-traded products and ordinary wagers.

Parallel litigation shows division. The Third Circuit ruled for Kalshi on New Jersey, while the Ninth Circuit sided with Nevada. New Jersey seeks Supreme Court review. The National Football League filed October 8 supporting state regulators on sports integrity. Kalshi must respond by November 9 to the New Jersey petition.

The full Sixth Circuit will decide on rehearing. A grant reopens whether federal swap treatment blocks state enforcement. The split decisions and pending rulemaking expose persistent jurisdictional uncertainty. Operators cannot yet treat these products as uniformly federally regulated. Final CFTC action and potential Supreme Court involvement will determine which authority governs, leaving prediction platforms exposed to enforcement risk in the interim.

Reporting: Casino Beats

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