Federal Judge Lets Ohio Enforce Gambling Law Against Kalshi Contracts

A federal judge in Ohio has refused to stop state regulators from enforcing gambling law against Kalshi, the prediction-market operator, finding that the company is unlikely to win its argument that federal commodities law overrides state rules. Chief Judge Sarah D. Morrison of the U.S. District Court for the Southern District of Ohio denied Kalshi’s request for a preliminary injunction on Monday, according to The Block and Bloomberg Law.

The practical effect, Bloomberg Law reported, is that Ohio gambling regulators can take action against Kalshi while the lawsuit continues. Morrison found Kalshi “unlikely to succeed by the end of the case,” the outlet said. Kalshi filed the suit in October 2025 against state officials in order to keep operating in Ohio, according to Bloomberg Law. SportsBettingDime reported that the company’s complaint said the Ohio Casino Control Commission and the state attorney general had threatened criminal penalties unless it stopped offering event contracts in the state by late October.

Kalshi’s legal theory is that its event contracts fall under the Commodity Exchange Act, which the Commodity Futures Trading Commission enforces, and that federal authority therefore supersedes state law, The Block reported. Bloomberg Law placed the case within a wider set of lawsuits in which prediction markets argue that the CFTC is the only agency with regulatory power over them.

Morrison rejected that reading on two grounds, according to the outlets. The Block reported that she found no sign Congress meant the act to override state sports betting laws, drawing on the history of the Professional and Amateur Sports Protection Act, which largely barred states from authorizing sports betting, and on the 2010 Dodd-Frank amendments. “History reveals no evidence that Congress intended to preempt state sports gambling laws,” she wrote, per The Block. SportsBettingDime and NBC News reported that she also took up the question of what counts as a “swap” under the act. In her view, the term fits instruments that directly affect commodity prices, such as currency exchange rates, weather and energy costs, and sports point totals do not. She wrote that treating sports contracts as swaps would push all sports bets onto designated contract markets like Kalshi and force sportsbooks nationwide out of business, a result she called absurd without clear direction from Congress, according to SportsBettingDime and NBC News.

Kalshi said it will appeal, The Block and NBC News reported. A company spokesperson told The Block that Kalshi “respectfully disagree[s]” with the decision and noted that it conflicts with a federal court ruling in Tennessee issued a few weeks earlier; NBC News likewise reported Kalshi’s recent win in Tennessee. SportsBettingDime reported that the spokesperson said the company would promptly seek an appeal.

The Tennessee case points the other way. According to SportsBettingDime, U.S. District Judge Aleta A. Trauger granted Kalshi a preliminary injunction about three weeks earlier, letting it keep offering sports event contracts during its lawsuit against the Tennessee Sports Wagering Council, which followed a January cease-and-desist letter. The Block said that judge found Kalshi likely to succeed in arguing that sports event contracts qualify as swaps under federal commodities law, which could preempt state regulation.

Ohio’s regulator has been in the dispute for months. The Block, citing the court filing, reported that the Ohio Casino Control Commission accused Kalshi in 2025 of running illegal sports betting in the state. SportsBettingDime said Kalshi also pointed to an Aug. 25 letter from the commission to licensed sportsbook operators that reportedly threatened to revoke Ohio licenses for any operator partnering with Kalshi, even for activity in other states. Kalshi argued that these actions caused immediate, irreparable harm to the company, its customers and its business partners.

The Block said the outcome of the fight with several states could also affect rival prediction market Polymarket. Neither outlet reported a date for Kalshi’s appeal.