Tennessee Attorney General Jonathan Skrmetti announced that his office has filed an opening brief in the U.S. Court of Appeals for the Sixth Circuit, urging the court to reverse a lower court decision that currently prevents the state from enforcing its sports wagering laws against online platform KalshiEX LLC.

Kalshi offers contracts based on the outcomes of sporting events, including game winners, player performances, and point spreads. These products are similar to those offered by licensed sportsbooks such as FanDuel, DraftKings, and BetMGM, which operate under Tennessee’s Sports Gaming Act. The Act requires operators to obtain a license, implement consumer protections, and pay taxes. Kalshi contends that it is exempt from these requirements because its offerings qualify as “swaps” under the federal Dodd-Frank Act, placing them exclusively under the jurisdiction of the Commodity Futures Trading Commission.

Tennessee rejects this argument, asserting that Dodd-Frank was enacted in response to the 2008 financial crisis to regulate complex financial instruments used by banks and large institutions for hedging risk—not to cover sports wagering. The state argues that Kalshi’s products bear no resemblance to the instruments Congress intended to regulate, and broadly interpreting “swap” to include sports bets would undermine significant portions of the statute. Federal law requires clear congressional intent before granting a federal agency sweeping authority over an entire industry, which did not occur here for sports betting. Tennessee further maintains that even if Kalshi’s products were considered swaps, federal law would not preempt the state’s regulatory authority.

The case is proceeding on an expedited basis in the Sixth Circuit, alongside a related case from Ohio. Attorney General Skrmetti emphasized that Kalshi’s platform is fundamentally sports gambling and must comply with state laws designed to protect consumers, support education through tax revenue, and ensure fair operations.