A federal judge in Tennessee granted a preliminary injunction blocking state officials from enforcing sports betting laws against Kalshi’s event contracts while litigation proceeds. The court found the prediction markets platform is likely to succeed in arguing that its sports-related contracts qualify as swaps under the Commodity Exchange Act.
The decision prevents Tennessee regulators from applying state gaming laws to Kalshi, a platform regulated by the Commodity Futures Trading Commission (CFTC) that offers binary contracts tied to real-world events. The firm has maintained that its products fall under exclusive federal jurisdiction, preempting state-level gambling enforcement.
The ruling adds to a growing patchwork of legal outcomes across US jurisdictions as regulators and courts debate whether event-based contracts constitute derivatives or wagering instruments. The case highlights broader regulatory tensions between state gaming frameworks and federal oversight of emerging prediction markets and financial event contracts.
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