Is Kalshi legal in Tennessee?

Tennessee's sports-wagering regulator is the Tennessee Sports Wagering Council, which enforces the Tennessee Sports Gaming Act. The Sixth Circuit's opinion summarizes the state's rules: Tennessee defines interactive sports wagering as wagering "via the internet, a mobile device, or other telecommunications platform," requires bettors to be 21 and "physically located in Tennessee" (p.8, citing Tenn. Code Ann. §§ 4-49-102 and 4-49-111). It adds that both Ohio's and Tennessee's gaming laws "establish numerous requirements relating to licensing, tax obligations, and consumer protection," citing § 4-49-117 as an example (p.8). It also says "Kalshi does not currently comply with either State's gaming laws" (p.8).

In the opinion's account, the Council told the CFTC in 2025 that sports-event contracts offered by CFTC-regulated entities violate the state's sports-gaming rules, on the position that Kalshi "accepts a sum of money risked on the outcome of a sporting event without a valid license" from the Council. In early 2026 it sent Kalshi a cease-and-desist letter "demanding that it halt offering sports-event contracts to customers in Tennessee" (p.11). Kalshi's rehearing petition dates the letter to January 2026 (p.7). We could not read the letter itself.

Kalshi then sued the Council, its chairman William Orgel, its executive director Mary Beth Thomas and Attorney General Jonathan Skrmetti in federal court in Nashville: KalshiEX v. Orgel, M.D. Tenn. No. 3:26-cv-00034, before Judge Aleta A. Trauger. The court entered a temporary restraining order the same day. After a hearing it granted Kalshi's preliminary-injunction motion in part, holding that sovereign immunity shielded the Council itself but that Kalshi's sports-event contracts are "swaps" and that federal law conflict-preempts Tennessee's regulation of them (p.11). The three officials appealed; the Council did not (p.11, n.5). We could not read the district court's order, and we could not determine its date.

The Sixth Circuit heard Tennessee's appeal (No. 26-5235) together with Kalshi's appeal against Ohio (No. 26-3196) on July 30, 2026, and decided both in one opinion on September 25, written by Judge Julia Smith Gibbons for a panel with Judges Clay and Bloomekatz (p.1). It held three things:

• Kalshi has a cause of action to challenge state enforcement, which Tennessee had disputed (pp.13-15).
• Kalshi "has not shown that its sports-event contracts satisfy the statutory definition of a 'swap'" that falls within the CFTC's exclusive jurisdiction (p.3).
• Even assuming they are swaps, the Commodity Exchange Act "neither expressly nor impliedly preempts Ohio's or Tennessee's gambling laws" (p.3).

It vacated the Tennessee injunction and sent the case back "for further proceedings consistent with this opinion" (p.49). Because Kalshi had not shown it was likely to succeed, the court did not reach the other injunction factors (p.49). The ruling reviews a preliminary injunction, not a final judgment, and its holdings are about Kalshi's sports-event contracts.

Attorney General Skrmetti's release of September 28 calls the decision "a great win for Tennessee" and says "This decision lifts an order that previously blocked the State from enforcing those laws against the company." It describes the opinion as unanimous.

Kalshi filed a petition for rehearing and rehearing en banc on October 9, 2026, the 14th day after the decision, which is the window Rule 40(d)(1) of the Federal Rules of Appellate Procedure allows unless an order or local rule changes it. Under Rule 41, the court's mandate issues seven days after an order denying a timely petition, unless the court changes that time, and "The mandate is effective when issued."

As of October 21, 2026, we could not determine whether the court has ruled on Kalshi's petition or issued its mandate: the Sixth Circuit's docket is on PACER and we did not read it, and no document we read reports either. So we could not determine whether the district court's injunction still binds Tennessee's officials today. The attorney general's position, in his release, is that the decision lifts it. We found no lawsuit by Tennessee against Kalshi and no court order requiring Kalshi to stop offering anything in the state.

We could not determine what happens to withdrawals, deposits or open positions for Tennessee customers. None of the documents we read addresses them: not the Sixth Circuit's opinion, not Kalshi's rehearing petition and not the attorney general's release. The cease-and-desist letter, as the opinion describes it, demanded that Kalshi stop offering sports-event contracts to customers in Tennessee; we could not read it to see whether it says anything about existing accounts. We also could not confirm from Kalshi's own pages whether it has changed what it offers Tennessee users.

Kalshi's position is that its contracts are derivatives traded on a CFTC-designated contract market, governed by federal law rather than state gambling law. Its rehearing petition argues the decision is "irreconcilable with recent decisions of the Third and Ninth Circuits" and departs from the Sixth Circuit's own precedent (pp.2-3). It also points to two CFTC actions of October 9, 2026: a proposed rule that would define "swap" to include event contracts, which in the petition's quotation of it covers "sports-, politics-, cultural-, and weather-related events", and an interim final rule excluding casino-style gambling products that are not traded on an exchange (pp.1-2, 19). The proposal is not in force.

The opinion's counsel list for the Ohio appeal names CFTC lawyers on the brief, grouped under "for Amici Curiae" (p.2). Kalshi's petition says the court "denied the CFTC's unopposed request to participate" (p.7).

The federal appeals courts that have ruled disagree. The Third Circuit ruled for Kalshi against New Jersey on April 6, 2026 (KalshiEX v. Flaherty, No. 25-1922). On August 28 the Ninth Circuit affirmed a Nevada court's order dissolving Kalshi's injunction (KalshiEX v. Assad, No. 25-7516; opinion p.9, n.3); Kalshi's petition notes a rehearing petition filed there on September 9 (p.3). Three petitions on the question are at the Supreme Court, none filed by Kalshi or Tennessee: New Jersey's, from Kalshi's Third Circuit case (No. 26-299), and two from Nevada cases brought by Robinhood (No. 26-338) and Crypto.com (No. 26-344). As of October 21, 2026 all three were pending, with responses due November 9, 13 and 16. Kalshi at the Supreme Court follows the petitions, and is Kalshi gambling? sets out both sides.

The same opinion affirmed a federal court's refusal to block Ohio's gambling law against Kalshi; the Ohio case is on the Kalshi legal page. Michigan, also in the Sixth Circuit, has its own page: is Kalshi legal in Michigan?. Kalshi did not appeal the district court's dismissal of the Council from its Tennessee suit, so the case continues against the three officials (opinion p.15, n.6). We found no other Tennessee court or regulator action naming Kalshi.

We found no Tennessee order or letter aimed at brokers that offer Kalshi's contracts, such as Robinhood or Coinbase. The Tennessee case is Kalshi's own suit against the state's officials, and the Sixth Circuit's opinion names no broker.

Nothing in the Sixth Circuit's decision addresses federal tax, and a state gambling ruling isn't a ruling on federal income tax. How Realize rebuilds gains and losses from Kalshi's data is in how to file Kalshi taxes.