The U.S. Court of Appeals for the Sixth Circuit did not bless KalshiEX LLC as a 50-state sportsbook. On September 25, 2026, a unanimous panel held that Kalshi’s sports-event contracts are not “swaps” under the Commodity Exchange Act (CEA), so they do not sit inside the Commodity Futures Trading Commission’s exclusive jurisdiction. Even if they were swaps, the court said Ohio and Tennessee gambling laws still apply.
That is a preliminary-injunction ruling in two paired appeals, not a nationwide listing ban and not a bitcoin halt. Bitcoin last printed $84,290 on the site CoinGecko snapshot fetched at 2026-09-27T00:56:51+00:00, up 0.46% over 24 hours. Ether was $2,693.35; Solana was $120.76. The tape is context. The document is the story.
I care about venue risk more than the cheer around “prediction markets.” Sports contracts are where state cops actually show up. Crypto event contracts were already on Kalshi’s menu, per the opinion, but they were not what Ohio and Tennessee came to stop.
What happened
Judge Julia Smith Gibbons wrote for Judges Clay, Gibbons, and Bloomekatz in KalshiEX LLC v. Schuler and KalshiEX LLC v. Orgel, Sixth Circuit Nos. 26-3196 and 26-5235, file 26a0272p.06. Argument was July 30, 2026. The opinion was decided and filed September 25, 2026. The official PDF is on the Sixth Circuit opinions host (file 26a0272p.06).
Kalshi runs a designated contract market (DCM). Participants buy and sell event contracts: derivatives whose payoff depends on a specified event. The panel recites that Kalshi first listed contracts across climate, crypto, economics, politics, and popular culture, then added sports-event contracts in early 2025. Ohio’s Casino Control Commission sent a cease-and-desist letter, saying unlicensed sports-event contracts offered to people in Ohio violated state sports-gaming law, including the 21-and-over age line. Kalshi sued in the Southern District of Ohio (No. 2:25-cv-01165, Chief Judge Sarah Daggett Morrison) and argued the CEA preempts those state laws because the CFTC has “exclusive jurisdiction” over swaps on DCMs. Morrison denied a preliminary injunction. Tennessee’s Sports Wagering Council took a parallel path. Kalshi sued in the Middle District of Tennessee (No. 3:26-cv-00034, Judge Aleta Arthur Trauger), and that court granted a preliminary injunction on the view that the contracts are swaps and conflict preemption applies.
The Sixth Circuit reversed the Tennessee win and kept the Ohio loss. It held Kalshi had not shown the sports-event contracts meet the statutory swap definition in 7 U.S.C. § 1a(47)(A)(ii), which covers an agreement whose payoff is based on the occurrence or nonoccurrence of an event “associated with a potential financial, economic, or commercial consequence.” The panel’s test is whether the event itself has an inherent financial consequence that would make hedging or price discovery a reasonable use (the opinion’s example is a change in interest rates). A tennis winner or a point total, it said, has only downstream economic effects, if any. The court also pointed to Kalshi’s prior-litigation concession that these sports contracts have “no inherent economic significance,” do not “have any real economic value,” and “carry no economic risks.”
Independently, the panel held the CEA neither expressly nor impliedly preempts Ohio’s or Tennessee’s gambling laws. Geofencing, which Kalshi called technically hard, was not treated as legal impossibility. The court affirmed Ohio’s injunction denial, vacated Tennessee’s injunction, and remanded.
Context
This is the second federal appellate loss on the sports-as-swaps theory that we have walked in public. We already covered the Ninth Circuit’s August 28, 2026 Assad decision as sports contracts as bets, not swaps. The Sixth Circuit cites that case and the other side of the split: the Third Circuit’s KalshiEX, LLC v. Flaherty, 172 F.4th 220 (3d Cir. 2026), which affirmed a New Jersey preliminary injunction for Kalshi. A Fourth Circuit appeal from Maryland remains pending, docketed as No. 25-1892 after KalshiEX LLC v. Martin. Circuit splits of this kind are how Supreme Court petitions get written. They are not a live national rule.
State pressure on prediction venues is not new on this desk. Washington already put a geofence clock on Kalshi sports and election products; see our Washington geofence clocks note. In Europe, ESMA’s report was about missing licences, not a continent-wide product ban; that read is in ESMA TRV: Polymarket and Kalshi lack EU licences. The pattern is the same: a primary document that looks like a death sentence is usually a venue map.
Bitcoin did not need this opinion to trade. Coinbase’s BTC-USD 24-hour stats at 2026-09-27T01:13:29Z showed last $84,363.81, session high $84,470.44, low $83,810.69, and 1,839.68 BTC of reported volume. That is spot depth on one U.S. venue, not Kalshi open interest. If you want the structural vocabulary, start with our market structure glossary and the blockchain news category rather than a sports-ticker screenshot.
A same-file RECAP copy of the opinion is also on CourtListener storage if the court’s PDF mirror hiccups. Read the court file, not the recap headline. For how we treat outlet copy versus the underlying document, use how to follow crypto news without getting played.
Our read
My stance: in the Sixth Circuit, Kalshi’s sports-event book is a state-licensed gambling problem until a higher court says otherwise. It is not a CFTC-supervised swap book that Ohio and Tennessee must leave alone. Crypto contracts on the same DCM do not ride this opinion to safety, and they were not the contracts the panel defined out of the swap statute.
Falsifiable claim: by 2027-03-31 23:59 UTC, either (a) the Sixth Circuit withdraws or reverses file 26a0272p.06 in Nos. 26-3196/5235 so that Kalshi’s sports-event contracts are treated as CEA swaps under exclusive CFTC jurisdiction that preempts Ohio and Tennessee sports-gambling enforcement, or (b) the Supreme Court issues a merits decision holding those sports-event contracts are such swaps. If neither happens, this September 25 holding remains the live appellate rule for these injunction fights in the Sixth Circuit.
I would rather be wrong on a docket than sell a “prediction markets won” headline. Narrative is cheap. Exit liquidity, and a geofence, is not.
What to watch
Watch the Tennessee remand first. Vacating a preliminary injunction puts the Sports Wagering Council’s enforcement tools back in play unless the district court or a further stay says otherwise. Ohio already had no injunction; nothing in this opinion creates one.
Watch the split. Third Circuit versus Ninth and now Sixth is the petition fuel. A grant of certiorari would be a new primary. A cert denial would leave the map patchy: New Jersey under one appellate story, Ohio-Tennessee-Kentucky-Michigan under another, Nevada under the Ninth Circuit’s sports-as-bets line.
Watch product mix, not slogans. If Kalshi’s public contract list still shows sports in Sixth Circuit states after this remand window, that is an operational choice under state law, not proof the CEA displaced those statutes. If crypto, politics, or weather contracts get pulled in the same geofence, that is a business decision the September 25 holding does not require.
The PDF is 49 pages. The holding fits in two sentences. Sports-event contracts are not swaps on this record, and state gambling law is not displaced. Everything else is commentary.