Kalshi seeks full Sixth Circuit review of states' regulation win

Kalshi has asked the full Sixth Circuit to reconsider a ruling allowing Ohio and Tennessee to pursue regulatory action against the company over unlicensed online sports gambling, according to Bloomberg Law.

The company petitioned the Cincinnati-based court on Oct. 9 for en banc review of the three-judge panel’s Sept. 25 decision. The request seeks another hearing of a dispute over states’ authority to act against prediction-market platforms.

Kalshi challenges state authority

In its filing, Kalshi argued that the panel wrongly allowed states to take punitive action against it and other prediction-market operators, Bloomberg Law reported. The petition challenges that outcome; the available reporting does not indicate that the full court has agreed to rehear the case.

Kalshi also pointed to proposed rules unveiled on Oct. 9 by the federal Commodity Futures Trading Commission. According to Bloomberg Law, the proposals would further define “swaps” to encompass the event contracts offered by these platforms, including contracts tied to sports, politics and other occurrences.

Federal proposal enters the dispute

Kalshi presented the proposed rules as support for its challenge to the panel’s ruling. The Commodity Exchange Act defines swaps, but the supplied report does not include the remainder of its discussion of that statutory framework.

The immediate procedural question is whether the full Sixth Circuit will review the panel’s decision. Separately, the CFTC measures described in the report remain proposals, rather than finalized rules.

What it means for prediction markets

• Rehearing is not assured: Kalshi’s Oct. 9 petition asks for full-court review; it does not establish that the Sept. 25 ruling has been reversed.
• State authority remains central: The challenged decision allows Ohio and Tennessee to take regulatory action over Kalshi’s offering of unlicensed online sports gambling.
• Contract classification matters to the dispute: Kalshi is relying on the CFTC’s proposed treatment of event contracts as swaps to bolster its argument against state punitive action.