Prediction market platform Kalshi has obtained a preliminary injunction in Tennessee blocking regulation of prediction markets, The Block reported on Feb. 20 local time.
Judge Aleta A. Trauger of the U.S. District Court for the Middle District of Tennessee ruled Kalshi’s sports event contracts are likely to be recognised as swaps under the federal Commodity Exchange Act, and prevented the state government from regulating Kalshi, The Block said.
Kalshi is a platform approved by the Commodity Futures Trading Commission (CFTC) and offers options contracts on various events including sports games, weather and Supreme Court rulings. Several U.S. states have tried to regulate Kalshi, saying its sports contracts amount to unlicensed sports betting. Tennessee authorities also demanded Kalshi halt operations and warned it was violating a state sports gaming law, but the ruling blocked the state government’s regulatory authority.
The judge accepted Kalshi’s argument that sports game outcomes can have economic effects and found federal regulation takes precedence, making state licensing requirements invalid. Legal experts said, "It is a different result from the New Jersey and Nevada rulings, and it is highly likely to go to the Supreme Court," in their analysis.
Chi-gyu Hwang
delight@d-today.co.kr