CFTC backs Kalshi in Ohio appeal: fight over prediction markets

The U.S. Commodity Futures Trading Commission (CFTC) filed an amicus brief with the U.S. Court of Appeals for the Sixth Circuit supporting KalshiEX LLC’s appeal, urging the court to reaffirm that event contracts offered on prediction markets are subject to federal oversight. CFTC Chair Michael S. Selig said a district court in Ohio applied an improperly narrow view of the commission’s jurisdiction and asked the appeals court to correct that error.

Kalshi has faced enforcement actions and cease-and-desist orders from multiple states after offering contracts tied to sports outcomes and other events; Ohio’s 2025 complaint labeled certain contracts as unlicensed sports betting. In its brief the CFTC argues that federal law and the Commodity Exchange Act create a comprehensive regulatory regime for these instruments and preempt state gambling laws as applied to CFTC-regulated markets.

The filing adds to a patchwork of recent appellate rulings and regulatory moves that have left the sector in legal uncertainty. Earlier this year a federal appeals court in another circuit ruled that state gaming regulators could not block Kalshi’s markets in their jurisdiction, a decision that highlights the potential for divergent circuit outcomes and market implications for platform access and product offerings.

The dispute sits within a broader regulatory tug-of-war between federal agencies and state authorities: the federal government has pursued legal actions in several states and state attorneys general have filed counterclaims or amicus briefs defending state gambling laws. The result is an intensifying legal and political contest over whether prediction markets constitute traditional derivatives under Dodd-Frank or fall within states’ policing powers over gambling.

Legal analysts say the Sixth Circuit’s ruling could be decisive for industry structure and regulatory clarity; a split among circuit courts would likely push the issue toward the U.S. Supreme Court or prompt new congressional guidance. Market participants and exchanges will be watching closely, since the outcome will determine both compliance obligations and the commercial footprint of prediction markets across U.S. states.