An Ohio judge isn’t buying Kalshi’s argument that its right to operate as a federally-regulated prediction market supersedes state laws governing sports betting.
“History reveals no evidence that Congress intended to preempt state sports gambling laws,” Chief Judge Sarah D. Morrison of the U.S. District Court for the Southern District of Ohio said in a ruling from Monday.
Judge Morrison denied Kalshi’s request for a preliminary injunction, which the company sought to block Ohio regulators from enforcing the state’s gambling laws against its event contracts. Kalshi operates a prediction markets platform which allows people to wager on the outcomes of specific events, including sports.
The setback is part of a broader legal battle between Kalshi and various states, as the company and regulators are at odds over whether the event contracts the prediction market platform offers — which allow users to bet on positive or negative outcomes — amount to sports betting.
Kalshi’s predicament is serving as a test of whether prediction markets are subject to federal derivatives law or state gambling rules. How these cases are decided could impact the legal future of other prediction platforms, including its rival Polymarket.
Kalshi argues that the events contracts it offers are regulated under the Commodity Exchange Act, which is enforced by the Commodity Futures Trading Commission (CFTC), and that authority supersedes state law.
Last year, the Ohio Casino Control Commission accused Kalshi of running illegal sports betting in the state, according to the court filing.
In the judge’s ruling, Morrison cited more historical evidence when making her case that Congress did not intend to preempt state gambling laws.
“Consider the legal landscape in 2010, when Dodd-Frank amended the CEA to govern swaps. At the time, the Professional and Amateur Sports Protection Act… largely prohibited states from authorizing sports betting,” the judge wrote. “There is no evidence that Congress intended the Commodity Exchange Act to preempt sports gambling laws in those few states where it was allowed under PASPA. In fact, all available evidence points to the contrary.”
A Kalshi spokesperson said an appeal was forthcoming: “We respectfully disagree with the Court’s decision, which splits from a decision from a federal court in Tennessee just a few weeks ago, and will promptly seek an appeal,” they said.
© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Trade Crypto On Coinhub Exchange
Trade Crypto On Coinhub Exchange
Stay ahead of the market by turning news insights into trading opportunities. With Coinhub Exchange, you can seamlessly buy, sell, and manage your digital assets, all in one secure platform. Take advantage of real-time market insights, deep liquidity, and fast execution for your favorite cryptocurrencies. Don’t just read about it — trade crypto now!
Disclaimer
The content of this article shown by Coinhub News, powered by The Block, is for informational purposes only and should not be construed as financial, legal, tax, or investment advice. Coinhub News and its affiliates are not a licensed financial advisor, legal advisor, broker, or tax advisor, and ... should not be considered as professional advice or a recommendation to engage in any specific investment, legal decision, or financial transaction. Cryptocurrency markets are highly speculative and volatile. Readers should perform their own independent research and consult with a qualified professional before making any financial or legal decisions. The opinions expressed in this article are those of the author and do not necessarily represent the views or opinions of the Company of its affiliates. Additionally, the Company does not make any representations or warranties regarding the accuracy, timeliness, reliability, or completeness of any information in this article. By accessing this content, you acknowledge that any reliance on the information contained in this article is solely at your own risk. The Company is not responsible for any financial losses, legal disputes, or other damages that may arise from reliance on this content or from any investment or legal decisions based on the information provided. Investing in cryptocurrencies involves substantial risks, including the risk of losing your entire investment, and you should carefully consider whether it is appropriate for your circumstances.
Read more
