In a major legal victory for the state, the U.S. Court of Appeals for the Sixth Circuit has ruled that Tennessee can enforce its sports betting regulations against the online platform Kalshi. The unanimous decision rejects Kalshi’s argument that federal commodities law exempts its sports-event contracts from state oversight, lifting a previous block that had prevented the state from taking action against the unlicensed company.

Kalshi had maintained that its wagers qualified as financial “swaps” under the Commodity Exchange Act, placing them exclusively under federal jurisdiction and outside the reach of state regulators. However, the court dismissed this claim, noting that federal commodities laws apply to risk-management financial tools rather than sporting events, which carry no inherent economic consequence or real financial risk. The court further emphasized that even if the contracts were considered federal financial products, federal law does not bar states from regulating gambling.

Tennessee Attorney General Jonathan Skrmetti praised the ruling, stating that it prevents companies from bypassing state rules, taxes, and vital consumer safeguards designed to protect bettors. The Sixth Circuit resolved Tennessee’s appeal alongside a parallel case originating from Ohio.