# Federal Circuit Upholds State Regulation of Sports Event Contracts

The U.S. Court of Appeals for the 6th Circuit ruled against Kalshi, affirming that states retain authority to regulate sports event contracts under their gambling laws. This decision contrasts with the 3rd Circuit's ruling that federal law preempts state regulation, creating a circuit split likely to prompt U.S. Supreme Court review to clarify jurisdictional boundaries over sports prediction markets. This legal uncertainty impacts market operators and regulatory compliance strategies in the emerging sports event contract sector.

- Procurement professionals should note the evolving regulatory landscape affecting sports event contract platforms, which may influence contract terms and compliance requirements.
- Market operators like Kalshi and CME Group face differing regulatory interpretations, affecting their operational and procurement planning.
- Agencies and contractors involved in regulatory oversight or technology provision for sports prediction markets should prepare for potential shifts pending Supreme Court guidance.
- This ruling underscores the importance of monitoring federal and state regulatory developments impacting procurement and market operations in gambling-related financial instruments.

**Jurisdictions:** federal
**Industries:** Professional Services
**Topics:** Regulatory Compliance
**Published:** September 26, 2026

### Government Entities
- Commodity Futures Trading Commission (CFTC)
- United States Senate Committee on Agriculture, Nutrition, and Forestry
- U.S. Court of Appeals for the 6th Circuit
- U.S. Court of Appeals for the 3rd Circuit
- U.S. Supreme Court

### Vendors
- Kalshi (market operator)
- CME Group (market operator)

### Key Quotes
> I really believe its 2007. The housing market has been supplanted by the speculation market, including predictions and everything else, and this could be a disaster waiting to happen.
> — Terry Duffy, CEO, CME Group

### Sources
- [Kalshi Loses Event Contract Ruling as Federal Circuit Split Widens](https://www.sportico.com/law/analysis/2026/kalshi-circuit-split-scotus-1234945840) - Sportico.com