The Commodity Futures Trading Commission filed an amicus brief with the Sixth Circuit Court of Appeals on May 13, 2026, supporting Kalshi’s legal challenge to Ohio’s ban on sports event contracts. The CFTC argues it holds exclusive federal jurisdiction over prediction markets and accused Ohio of “jurisdictional overreach” that threatens the agency’s longstanding regulatory authority over event contracts as financial derivatives.
Ohio’s State-Level Crackdown Sparks Federal Clash
Last year, Ohio authorities directed Kalshi to cease offering sports event contracts, classifying them as unlicensed sports gambling requiring state licensing. Kalshi sued Ohio authorities in October, but a federal district court rejected the platform’s request for relief in March. The CFTC’s intervention marks an escalation in the regulatory conflict between state and federal authorities over prediction market oversight. CFTC Chairman Mike Selig stated the district court “took an improperly narrow view of the Commission’s jurisdiction, and we are asking the Court of Appeals to correct that error.”
Federal Regulator Escalates Multi-State Campaign
The CFTC’s Kalshi brief is the second amicus filing the agency has issued on prediction markets in three months. In February, the CFTC filed a similar brief supporting Crypto.com in a separate case in the Ninth Circuit Court of Appeals. Beyond litigation, the CFTC has sued five states—Wisconsin, New York, Arizona, Connecticut, and Illinois—for blocking or restricting prediction market platforms. The agency oversees event contracts as swaps and binary options traded on designated contract markets (DCMs), a framework that covers Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase.
Regulatory Conflict Threatens Fragmented Market
The dispute reflects a fundamental disagreement: Ohio views sports event contracts as gambling instruments subject to state gaming commissions, while the CFTC asserts these are federal financial products beyond state jurisdiction. The CFTC’s brief warned that “Ohio’s jurisdictional overreach into the Commission’s sphere threatens regulatory upheaval” and cautioned that allowing states to restrict event contracts could imperil the agency’s broader authority over derivatives markets. Selig emphasized: “States cannot circumvent the clear directive of Congress.” A patchwork of state-level restrictions could fragment the U.S. prediction market industry.
Sixth Circuit Decision Will Set Precedent
The Sixth Circuit’s ruling on Kalshi’s appeal will likely influence ongoing battles in other jurisdictions and establish whether federal or state regulators control prediction markets. No timeline for the court’s decision has been announced. The outcome will determine whether platforms can operate nationwide under federal CFTC oversight or must navigate state-by-state licensing requirements. This case has become the central test of federal regulatory authority over digital derivatives markets.
