Appeals court rules against Kalshi, says prediction markets can be regulated like gambling

A federal appeals court has dealt a major setback to prediction markets, upholding state authority to treat them like gambling under Ohio and Tennessee laws. The 6th U.S. Circuit Court of Appeals rejected arguments that Kalshi’s sports-event contracts qualify as regulated financial "swaps," reinforcing broader restrictions on the industry. The unanimous ruling by three judges marks the latest legal challenge faced by prediction platforms seeking to operate outside traditional gambling frameworks. Legal experts will now watch closely to see how the decision could influence similar cases in other states.

The 6th U.S. Circuit Court of Appeals ruled against the prediction market Kalshi on Friday, determining states can regulate prediction market platforms like gambling in the latest blow to the industry. In a unanimous ruling, the three-judge panel sided with Ohio and Tennessee, finding Kalshi did not show its sports-event contracts are "swaps" that typically...