{"id":78813,"date":"2026-09-29T06:37:23","date_gmt":"2026-09-29T06:37:23","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/sixth-circuit-turns-kalshis-own-words-against-it-in-two-state-loss\/"},"modified":"2026-09-29T06:37:23","modified_gmt":"2026-09-29T06:37:23","slug":"sixth-circuit-turns-kalshis-own-words-against-it-in-two-state-loss","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/sixth-circuit-turns-kalshis-own-words-against-it-in-two-state-loss\/","title":{"rendered":"Sixth Circuit Turns Kalshi&#8217;s Own Words Against It in Two-State Loss"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Kalshi conceded that for a layperson, some contracts\u2019 economic effects may be \u201chard to see.\u201d<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Judges cited Kalshi\u2019s own rulebook and past court filings to reject its arguments.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Kalshi is 1\u20132 at federal appeals courts, with a Fourth Circuit ruling on Maryland still pending.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>Previous Legal Arguments Damage Kalshi\u2019s Case<\/h2>\n<p>A three-judge panel of the U.S. Court of Appeals for the Sixth Circuit ruled unanimously against Kalshi in two consolidated cases. It upheld an Ohio federal judge\u2019s refusal to block the state\u2019s Casino Control Commission and threw out an order that had shielded Kalshi from Tennessee\u2019s sports wagering officials. Both cases go back to the district courts. <a href=\"https:\/\/www.opn.ca6.uscourts.gov\/opinions.pdf\/26a0272p-06.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">Judge Julia Smith Gibbons wrote the opinion<\/a>, and Judges Eric Clay and Rachel Bloomekatz joined it.<\/p>\n<p>Per the court, Kalshi had not shown that its sports contracts are swaps, which are a kind of derivative the Commodity Futures Trading Commission (CFTC) <a href=\"https:\/\/news.bitcoin.com\/igaming\/cftc-seats-kalshi-polymarket-draftkings-on-its-new-advisory-panel\/\">claims exclusive jurisdiction<\/a> over. To qualify, the court held, the underlying event must be \u201cinherently associated\u201d with a financial consequence, such as a change in interest rates. Sports results have \u201conly downstream economic consequences, assuming they have the potential to cause economic consequences at all,\u201d Gibbons wrote. Even if the contracts were swaps, federal law would not override the two states\u2019 gambling laws, the judges wrote.<\/p>\n<p>The panel also tested Kalshi\u2019s broader reading at oral argument. The judges asked how contracts on the number of corner kicks in a game, or on whether an announcer says a particular word, could carry financial consequences. According to the opinion, Kalshi conceded that to a \u201clayperson\u201d it might be \u201chard to see how certain of these contracts have economic consequences,\u201d while cautioning the court that sports is a \u201chuge business.\u201d<\/p>\n<p>The court was not persuaded. If a layperson cannot discern the economic consequence, then it wrote, \u201cIt would be a stretch to say such a contract is \u2018associated\u2019 with potential economic consequences.\u201d<\/p>\n<p>The opinion also said Kalshi \u201chas agreed with this conclusion in past litigation.\u201d It quoted earlier concessions, recounted in a 2025 Nevada federal court decision, that the prediction market platform\u2019s sports-event contracts have \u201cno inherent economic significance\u201d and \u201ccarry no economic risks.\u201d The court also turned to a promise from Kalshi\u2019s own lawyers. At the Tennessee hearing, they said the exchange would not list a contract on the color of the Gatorade shower at the Super Bowl. Kalshi\u2019s reading of the law would cover exactly that contract, the judges wrote, since a broadcast yellow shower could plausibly lift sales of that flavor.<\/p>\n<p>Other old legal arguments also damaged Kalshi\u2019s case here. The first was a fallback argument that the CFTC\u2019s exclusive jurisdiction covers any agreement traded on its exchange. The court noted that Kalshi \u201cpreviously took the same position as we do here\u201d in earlier cases in Nevada, New Jersey and Maryland. The second was the argument that federal law occupies the entire field of exchange trading. There, the court cited Kalshi\u2019s own rulebook, which says user lawsuits against the exchange are governed by New York law, as evidence that state law already reaches trades on the platform.<\/p>\n<p>The opinion also sized up the business at stake, describing Kalshi\u2019s <a href=\"https:\/\/news.bitcoin.com\/igaming\/kalshis-parlay-maker-fee-brought-26-million-four-weeks\/\">parlay contracts<\/a> as ones \u201cof which it offers billions of dollars\u2019 worth per month.\u201d It rejected Kalshi\u2019s claim that complying with state-by-state rules was impossible. Geofencing may be costly, the court said, but \u201cexpensive does not mean impossible.\u201d<\/p>\n<h2>Kalshi Pushes Back<\/h2>\n<p>\u201cThe law does not require a swap to involve \u2018intrinsic\u2019 financial consequences\u2014and even if it did, sports clearly do,\u201d <a href=\"https:\/\/www.courthousenews.com\/sixth-circuit-says-states-can-regulate-kalshis-prediction-market\/\" target=\"_blank\" rel=\"noopener noreferrer\">Kalshi spokesperson Dani Lever told Courthouse News<\/a>, adding that the ruling \u201cshows exactly why a state-by-state patchwork doesn\u2019t work.\u201d Tennessee Attorney General Jonathan Skrmetti called it \u201ca great win for Tennessee.\u201d<\/p>\n<p>\u201cSports wagering is heavily regulated because it can do a lot of harm, and I\u2019m glad we thwarted Kalshi\u2019s efforts to remove every safeguard and put Tennessee sports bettors at risk,\u201d Skrmetti said. The Ohio attorney general\u2019s office did not respond to Courthouse News.<\/p>\n<p>The Sixth Circuit joins the Ninth, which <a href=\"https:\/\/news.bitcoin.com\/igaming\/ninth-circuit-ruling-sets-up-a-kalshi-supreme-court-fight-on-sept-3\/\">ruled against Kalshi in Nevada<\/a> on Aug. 28 and also quoted the company\u2019s earlier concessions back at it. The Third Circuit sided with Kalshi in New Jersey in April, and an appeal over Maryland is still pending in the Fourth Circuit. New Jersey <a href=\"https:\/\/news.bitcoin.com\/igaming\/kalshis-scotus-pregame-wait-for-the-cftc-to-rewrite-the-rules\/\">asked the Supreme Court<\/a> to take up the split on Sept. 2. Kalshi\u2019s response was originally due Oct. 8 but the deadline was extended on Sept. 22, and the response is now due Nov. 9.<\/p>\n<p>The ruling comes at the preliminary-injunction stage. It does not order Kalshi to stop offering any contracts, but it leaves both states free to enforce their laws while the cases continue. Ohio\u2019s regulator proposed a $5 million fine against Kalshi in April for offering sports gaming without a license. Kalshi <a href=\"https:\/\/defirate.com\/news\/kalshi-sues-ohio-over-5m-sports-prediction-market-fine\/\" target=\"_blank\" rel=\"noopener noreferrer\">sued in state court<\/a> in June to block it, arguing the state can\u2019t impose the penalty without a jury trial.<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/igaming\/sixth-circuit-turns-kalshis-own-words-against-two-state-loss\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways Kalshi conceded that for a layperson, some contracts\u2019 economic effects may be \u201chard to see.\u201d Judges cited Kalshi\u2019s own rulebook and past court filings to reject its arguments. Kalshi is 1\u20132 at federal appeals courts, with a Fourth Circuit ruling on Maryland still pending. Previous Legal [&hellip;]<\/p>\n","protected":false},"author":3947362403,"featured_media":78814,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/78813"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362403"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=78813"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/78813\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/78814"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=78813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=78813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=78813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}