Tennessee Judge Blocks State Crackdown on Kalshi Markets

A US federal judge in Tennessee has temporarily barred the state from enforcing its gambling laws against Kalshi’s sports event contracts. Judge Aleta Trauger of the US District Court for the Middle District of Tennessee issued the injunction, allowing Kalshi to continue offering sports-related event contracts to users in the state while the company’s lawsuit proceeds.

Trauger found Kalshi likely to prevail on its claim that federal commodities law preempts Tennessee’s attempt to treat its sports markets as illegal gambling. The court concluded the contracts qualify as “swaps” under the Commodity Exchange Act, giving the Commodity Futures Trading Commission exclusive jurisdiction, and held Tennessee’s enforcement efforts are likely preempted under conflict preemption.

The injunction covers the named state officials; the Tennessee Sports Wagering Council was dismissed on sovereign immunity grounds. The court ordered Kalshi to post a $500,000 bond.

United States, Tennessee

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