Kalshi Loses Ohio Court Fight Over Sports Contracts

 

A federal court in Ohio has denied a motion filed by prediction market company Kalshi to stop state regulators from overseeing sports contracts on its platform.

 

On Monday, Chief Judge Sarah Morrison of the U.S. District Court for the Southern District of Ohio rejected Kalshi’s request for a preliminary injunction that would have blocked the Ohio Casino Control Commission and the state attorney general from regulating the sports betting contracts offered by Kalshi.

 

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The judge ruled that Kalshi failed to prove its sports event contracts were exclusively supervised by the Commodity Futures Trading Commission (CFTC).

 

“Even if this court were to find that sports event contracts are swaps subject to the CFTC’s exclusive jurisdiction, Kalshi has not shown that the Commodity Exchange Act (CEA) would necessarily preempt Ohio’s sports gambling laws,” the opinion and order stated.

 

“Kalshi argues that Ohio’s sports gambling laws are field- and conflict-preempted by the CEA when it comes to sports event contracts traded on its exchange [...] Kalshi fails to establish that Congress intended the CEA to preempt state laws on sports gambling,” the opinion and order added.

 

Image credit: Court Listener

 

For clarity, here's a breakdown of what's going on:

• Kalshi asked an Ohio court to block the Ohio Casino Control Commission and the state’s attorney general from regulating its sports contracts, arguing that the contracts were already under the oversight of the CFTC, a federal regulator.
• The court denied the request, stating that Kalshi had not proven that the sports contracts on its platform were actually being regulated by the CFTC.
• The court further noted that although the CFTC had not taken action against the contracts, that does not make them legal under federal law.

 

 

Kalshi's Back-and-Forth Battle With Regulation

Despite CFTC Chair Michael Selig stating in February that federal regulators have exclusive jurisdiction over prediction markets, Kalshi and other prediction market companies continue to face challenges from state regulators seeking oversight.

 

In March 2025, the Nevada Gaming Control Board issued a cease-and-desist order against Kalshi, ruling that its sports event contracts constituted illegal sports wagers. Kalshi responded by filing a federal lawsuit, which resulted in a temporary restraining order and preliminary injunction, allowing the company to continue operating in the state.

 

However, a federal judge in Nevada later lifted the preliminary injunction, ruling that Kalshi must comply with the state’s gaming regulations.

 

Earlier this year, the Tennessee Sports Wagering Council sent cease-and-desist letters to Kalshi and other prediction market companies, stating that offering contracts on sports events was illegal in the state and constituted unlawful sports betting.

 

In response, Kalshi filed a lawsuit against state regulators in federal court and obtained a temporary restraining order preventing Tennessee authorities from enforcing the cease-and-desist order.