Prediction market Kalshi lost on appeal when a court ruled that Ohio and Tennessee can regulate sports-event contracts under their state gambling laws.
The 6th US Circuit Court of Appeals ruled against Kalshi on Friday when a three-judge panel sided unanimously with Ohio and Tennessee, finding that the prediction market failed to demonstrate its sports-event contracts are “swaps” under the jurisdiction of the Commodity Futures Trading Commission (CFTC).
The ruling followed a similar finding from the 9th Circuit Court of Appeals last month, which broke from an April decision by the 3rd Circuit Court of Appeals allowing the company to do business in New Jersey as its appeal process proceeds.
The April ruling said Kalshi was likely to succeed with its argument that federal law preempts New Jerseys regulations, all of which has set up a potential Supreme Court case.
Cointelegraph reported on Wednesday that a group of state lawmakers had filed an amicus brief with the Supreme Court, urging it to weigh in on the case between Kalshi and state gaming authorities, potentially resolving whether state authorities or federal agencies have jurisdiction over prediction market companies.