US court grants Kalshi injunction… “Federal law takes precedence”

Uk Jin

Summary

A federal court in Tennessee said it granted injunctive relief sought by prediction-market platform Kalshi.
Judge Alleta Trauger granted Kalshi’s preliminary injunction, temporarily halting state authorities’ enforcement of sports-betting laws.
Judge Trauger said Kalshi’s sports event contracts are likely covered by the Commodity Exchange Act, as swaps, and as derivatives, meaning federal regulation could take precedence.

A federal court in Tennessee has granted a motion for injunctive relief filed by prediction-market platform Kalshi.

According to The Block on the 20th (KST), Judge Alleta Trauger of the US District Court for the Middle District of Tennessee granted Kalshi’s request for a preliminary injunction. As a result, state authorities’ enforcement of sports-betting laws will be temporarily halted.

Previously, Tennessee state authorities demanded that Kalshi cease operations, arguing that its event-contract products constituted unlicensed sports betting.

Judge Trauger said Kalshi’s sports event contracts are likely to qualify as “swaps” under the federal Commodity Exchange Act.

This is interpreted as reflecting the view that Kalshi’s products could fall under federal-level derivatives regulation rather than state gambling rules. Even if the state considers them sports gambling, if they are recognized as derivatives under the Commodity Exchange Act, federal regulation could take priority.