Kalshi Suffers Court Loss in Ohio Over Sports Betting
Kalshi lost its Ohio injunction bid on March 10 as a federal judge ruled state sports betting laws can apply to prediction market contracts.
What to Know
- Ohio federal court denied Kalshi's motion for a preliminary injunction against state gambling regulators on Monday
- Chief Judge Sarah Morrison ruled Kalshi failed to prove sports event contracts fall under CFTC exclusive jurisdiction
- Kalshi plans to appeal and cited a conflicting Tennessee federal court ruling from weeks earlier
- CFTC Chair Michael Selig had publicly threatened lawsuits against any state regulating prediction markets — the Ohio court rejected that framing
Kalshi took a significant legal hit in Ohio on Monday when a federal judge denied the prediction markets company's bid to block state gambling regulators from applying sports betting laws to its platform — and the ruling lands harder than it might look.
What Did the Ohio Court Actually Decide?
Why the federal preemption argument failed
The answer, delivered by US District Court for the Southern District of Ohio Chief Judge Sarah Morrison, is straightforward: Kalshi did not prove that sports event contracts on its platform fall exclusively under federal commodities law. That's the core of it. Without that showing, the Ohio Casino Control Commission and state attorney general keep their authority to regulate — and enforce.
Kalshi had argued that the Commodity Exchange Act (CEA) gave the CFTC exclusive jurisdiction over its contracts, effectively blocking Ohio from treating them as sports bets requiring a state license. The judge wasn't buying it. CFTC exclusive jurisdiction over prediction markets is a claim CFTC Chair Michael Selig has pushed publicly since February, when he threatened lawsuits against any state authority that tried to step in. The Ohio court pushed back on that framing directly.
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] would necessarily preempt Ohio's sports gambling laws.
The CFTC's Silence Is Now a Problem
Here's what the ruling actually exposes. Kalshi's legal theory depends on the CFTC having exercised its authority over sports event contracts. The agency hasn't. And the Ohio Casino Control Commission scored a real win by pointing that out — because the judge agreed. The court wrote plainly that the agency's inaction "is not proof that the sports-event contracts are regulated by or permissible under the CEA."
That's a quiet but devastating observation. Selig is running around promising federal protection for prediction markets that the CFTC hasn't formally delivered. Ohio called that bluff.
Where Does Kalshi Go From Here?
The company said it "respectfully disagrees" with the ruling and will appeal promptly — pointing to a Tennessee federal court decision from just weeks ago that went the other way. That split between circuits is actually Kalshi's best argument going forward: inconsistent rulings across states make a stronger case for federal clarity.
Selig said last week that the CFTC is working on prediction market guidance "in the very near future." The chair is currently the only Senate-confirmed commissioner on a panel that normally has five. Whatever guidance comes out of a one-man commission will face its own challenges.
The prediction markets fight isn't over. But Kalshi is losing ground while waiting for the federal cavalry that hasn't arrived yet.