US Court Allows States to Enforce Gambling Laws on Prediction Markets
What happened
On September 25, 2026, the US Sixth Circuit Court ruled that Ohio and Tennessee can enforce their gambling laws against Kalshi's event contracts.
The Context
- State Oversight: The ruling allows states to regulate prediction markets, deepening a split among federal appellate courts on this issue.
- Kalshi's Position: Kalshi argued its contracts are federally regulated swaps, but the court found no grounds for preemption of state laws.
- Litigation Landscape: This decision adds to ongoing legal battles, with 34 out of 40 recent court rulings favoring state regulators over prediction market platforms.
The Number
— This statistic highlights the trend favoring state regulators, indicating a challenging environment for prediction market platforms.
Takeaway
Expect further legal scrutiny and potential Supreme Court involvement as states continue to assert their regulatory authority.
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