TLDR An Ohio federal judge ruled that Kalshi’s sports prediction markets count as gambling and must follow Ohio state law. The judge rejected Kalshi’s argument that its contracts are “swaps” covered by federal commodity law. Ohio Attorney General Dave Yost called it a “big win for Ohio” on social media. Kalshi says it will appeal the ruling, pointing to a conflicting decision from a Tennessee federal court. Courts in Massachusetts and Nevada have also sided with state regulators against Kalshi in recent months.
Kalshi, a New York-based prediction market platform, lost a key legal battle in Ohio this week. A federal judge ruled that its sports-related markets are gambling and must follow state law.
U.S. District Judge Sarah Morrison denied Kalshi’s request for an injunction against the Ohio Casino Control Commission. The commission had been trying to stop Kalshi from operating as an unlicensed sportsbook in the state.
Kalshi had argued that its contracts should be treated as “swaps” — a type of financial instrument regulated at the federal level under the Commodity Exchange Act. The judge did not accept that.
Morrison wrote that swaps are tied to things like currency exchange rates, weather, and energy costs — factors that directly affect commodity prices. The score of a basketball game does not meet that standard, she said.
“The number of points scored in the Huskies-Bobcats game does not,” she wrote, adding that calling a sports contract a swap would lead to “absurd” results.
The judge also found no evidence that Congress ever intended federal law to override state sports gambling rules. Her opinion ran 21 pages.
Ohio Attorney General Dave Yost was quick to respond. “Kalshi argued the federal Commodity Exchange Act preempts enforcement of Ohio law. Nope,” he wrote on X. “These ‘prediction markets’ have exploded