Ohio Vows to Enforce State Law Against Kalshi, Calls Sports Prediction Markets Illegal Gambling

Ohio Governor Mike DeWine said the state will treat sports-related trading on prediction market platform Kalshi as illegal gambling and enforce state law, after a federal appeals court declined to block Ohio’s regulatory action.

Ideastream, Ohio’s public broadcaster, reported on October 2 that DeWine said Kalshi was trying to evade sports-betting rules by operating under the banner of a prediction market. Kalshi must follow the same rules as other operators, he said.

The 6th U.S. Circuit Court of Appeals on September 25 upheld a lower court ruling denying Kalshi’s request for a preliminary injunction to stop Ohio from enforcing its regulations. The court said Kalshi had not sufficiently shown that its sports event contracts fall under the exclusive jurisdiction of the Commodity Futures Trading Commission. It also found that federal law does not preempt the application of state gambling laws.

Kalshi runs a platform where users trade contracts linked to the outcome of specific events, including elections, weather and economic indicators. Its clash with state regulators intensified after it added sports-related contracts last year. The Ohio Casino Control Commission said the offering amounted to unlicensed sports betting and told Kalshi to either halt the service or obtain a license and comply with related regulations and tax obligations.

In April, the commission also sent Kalshi advance notice that it planned to impose a $5 million penalty for operating unlicensed sports betting. Kalshi has sued to challenge the state’s action, maintaining that sports prediction contracts are not wagers under state law but federally regulated financial products.

Kalshi also objected to the appellate court’s decision. A company spokesperson said the market would be difficult to operate if rules differ by state and argued that consistent federal regulation is needed nationwide.