The Commodity Futures Trading Commission (CFTC) has filed an amicus brief in the United States Court of Appeals for the Sixth Circuit following a United States District Court decision involving Kalshi in Ohio.

 

 

Through this filing, the CFTC seeks to assert its exclusive jurisdiction over prediction markets and to overturn the ban previously imposed by Chief Judge Sarah D. Morrison of the United States District Court for the Southern District of Ohio.

 

“The federal district court in Ohio took an improperly narrow view of the Commission’s jurisdiction, and we are asking the Court of Appeals to correct that error,” said CFTC Chairman Michael S. Selig. “As I’ve said repeatedly, the CFTC will not allow overzealous state governments to undermine the agency’s longstanding authority over these markets.”

 

Kalshi’s Case Against Ohio

The March ban on Kalshi by an Ohio district court dates back to early 2025, when the Ohio Casino Control Commission (OCCC) issued a cease-and-desist order to Kalshi, instructing it to stop offering its sports event contracts in the state, alleging that those contracts were illegal.

 

Following this order, Kalshi sued state regulators and other state officials, seeking a preliminary injunction to block enforcement of the cease-and-desist order. However, the case was dismissed when Judge Sarah D. Morrison ruled against Kalshi, allowing state regulators to enforce the ban and later impose a $5 million fine on Kalshi for continuing to offer sports event contracts in the state.

 

Kalshi has now appealed to the United States Court of Appeals for the Sixth Circuit, seeking to overturn the ban. In its amicus brief filing, the Commodity Futures Trading Commission (CFTC) not only argues for the removal of the ban but also seeks to protect prediction market companies from what it describes as an ongoing campaign of state encroachment.

 

As part of its protective efforts, the CFTC has engaged in legal disputes with several U.S. states, including Wisconsin, Illinois, Arizona, Connecticut, and New York, over their regulatory stance and enforcement actions against prediction market companies.

 

Despite the challenging regulatory environment faced by prediction market companies, the sector has grown significantly. In 2025, annual trading volume across prediction market platforms rose to approximately $63.5 billion from $15.8 billion in 2024. The number of users across prediction market companies has also increased, with institutional investors showing greater interest and contributing more capital to these platforms.

 

 

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.

 

Image credit: CourtListener

 

 

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.