---
title: "The States May Regulate Prediction Markets as Gambling, a Sixth Circuit Panel Rules"
description: "A unanimous ruling for Ohio and Tennessee deepens a conflict among federal circuits and points toward the Supreme Court"
author: "Walter Pine"
published: 2026-09-25T23:56:46Z
modified: 2026-09-26T23:01:48Z
url: https://rews.cc/a/the-states-may-regulate-prediction-markets-as-gambling-a-six-69f6d9
language: en
tags: ["politics", "law", "economy", "regulation", "trump", "us"]
publisher: "Rews (https://rews.cc)"
---

# The States May Regulate Prediction Markets as Gambling, a Sixth Circuit Panel Rules

*A unanimous ruling for Ohio and Tennessee deepens a conflict among federal circuits and points toward the Supreme Court*

By Walter Pine · September 25, 2026 · https://rews.cc/a/the-states-may-regulate-prediction-markets-as-gambling-a-six-69f6d9

On Friday, in Cincinnati, a three-judge panel of the Sixth US Circuit Court of Appeals said the word prediction-market companies have been trying to keep out of the conversation: gambling. The panel ruled, unanimously, that Ohio and Tennessee may regulate Kalshi’s so-called event contracts under their state gambling laws, rejecting the company’s bid to have the contracts exempted from them.

Kalshi’s argument runs upward, to Washington: the company operates under federal oversight, and it contends that its contracts are swaps — instruments governed by the Commodity Exchange Act and policed by the Commodity Futures Trading Commission — and that federal law therefore leaves no room for state gambling regulators. [The opinion](https://www.cnbc.com/2026/09/25/appeals-court-rules-states-can-regulate-sports-prediction-markets.html), quoted by CNBC, answered that point directly. “Even assuming that Kalshi’s sports-event contracts are swaps, we alternatively hold that the CEA neither expressly nor impliedly preempts Ohio’s or Tennessee’s gambling laws.”

Preempts is the load-bearing term. Federal preemption is what lets a national rule push a state rule off the table, and by declining to find it, the Sixth Circuit has widened a split among the federal circuits. As [Sportico has tallied the map](https://www.sportico.com/law/analysis/2026/kalshi-circuit-split-scotus-1234945840/), the Sixth and Ninth Circuits now stand on one side, empowering states to regulate sports prediction markets through their gambling laws, while the Third Circuit has stood on the other, backing the federal regulator’s broader jurisdiction. The disagreement itself is the next fact: appeals courts at odds with one another are the door through which cases walk to the US Supreme Court, and the ruling, as Al Jazeera noted, opens it wider.

The context is an industry that has grown fast enough to make the question urgent. Prediction markets — venues where users buy and sell contracts on the outcomes of elections, games, and the calendar itself — have seen explosive growth, and the growth has carried ethical and regulatory questions with it: what is being sold, who checks the house, and whose rules apply when the house is a website. State regulators have not waited for an answer. New York has gone after Kalshi’s rival Polymarket directly, [suing it as unlicensed gambling](https://rews.cc/a/new-york-sues-polymarket-calling-its-prediction-market-unlic-734764) and drawing a countersuit arguing that only Washington may govern it.

So a national market now sits under a patchwork that a single sentence in Cincinnati can redraw. In the Sixth Circuit’s states, and in the Ninth’s, event contracts may be treated as the thing their critics call them everywhere. The circuits disagree, and the disagreement is the law until someone higher settles it.