Sept 25 (Reuters) – A US appeals court on Friday ruled against the prediction markets operator Kalshi, saying Ohio and Tennessee can regulate its so-called event contracts under their gambling laws.
The decision by the 6th US Circuit Court of Appeals in Cincinnati deepens a split among federal appeals courts over whether states or the federal Commodity Futures Trading Commission has authority to regulate the fast-growing industry.
Kalshi did not immediately respond to requests for comment.
Prediction markets are best known for letting people wager on the outcomes of sports events, though people can also wager on a wide variety of subjects including elections, the weather and cultural events such as the Oscars.
Circuit Judge Julia Smith Gibbons wrote for a unanimous three-judge panel that Kalshi did not show that its sports event contracts were “swaps” that should be regulated exclusively by the CFTC. She also said the federal Commodity Exchange Act did not preempt Ohio’s or Tennessee’s gambling laws.
Many states including Ohio and Tennessee, which are both Republican-controlled, have sought to crack down on prediction markets, putting them at odds with Republican President Donald Trump’s administration, as well as the CFTC.
(Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot)
