Ohio Court Denies Kalshi Injunction, Creating Sixth Circuit Split
A federal court in Ohio has denied Kalshi a preliminary injunction against state sports gambling enforcement
The legal battle over prediction markets and state gambling law has produced a significant new development.
A federal judge in Ohio has denied Kalshi a preliminary injunction against state officials, allowing Ohio to continue enforcing its sports gambling regulations against the platform while litigation proceeds.
The ruling directly conflicts with a recent decision by another federal court in Tennessee, which sided with Kalshi. Both courts fall within the Sixth Circuit, setting up a potential appellate resolution that could shape the future of the entire prediction market industry.
How the Ohio Dispute Began
The case traces back to April 2025, when the Ohio Casino Control Commission sent cease-and-desist letters to several prediction market platforms, including Kalshi, Robinhood, and Crypto.com. The OCCC argued the platforms were offering unlicensed sports betting in violation of state law.
Kalshi sued the OCCC and the Ohio Attorney General’s office in October, arguing that federal law preempts Ohio’s authority to regulate its products. The company’s core argument relies on the Commodity Exchange Act.
Because Kalshi is a federally licensed designated contract market overseen by the CFTC, it contends that federal derivatives law grants exclusive jurisdiction over its event contracts, leaving no room for state gambling regulators to intervene.
U.S. District Court Chief Judge Sarah Morrison rejected that argument. She found that Kalshi had not met the high burden required for preliminary injunctive relief, which demands a strong showing of likely success on the merits.
The Central Legal Question: Are Sports Contracts “Swaps”?
The case, like similar disputes in other states, turns on whether Kalshi’s sports event contracts qualify as “swaps” under the CEA. Swaps fall exclusively under federal jurisdiction. If sports event contracts meet that definition, state gambling laws cannot reach them.
Judge Morrison concluded they likely do not. She noted that federal derivatives markets are built around financial variables with direct commercial relevance, such as commodity prices, currency exchange rates, and weather conditions. Sports outcomes, she reasoned, do not serve the same economic function.
The opinion drew a sharp line. Under Kalshi’s interpretation, every sports wager would qualify as a federally regulated swap, which would effectively require all sportsbooks in the country to operate as CFTC-licensed exchanges. The judge found that result incompatible with congressional intent.
The court also cited the CEA’s legislative history. During 2010 deliberations on the Dodd-Frank Act, Senator Blanche Lincoln, now a lobbyist for Kalshi, acknowledged that sports event contracts constructed around events like the Super Bowl or the Masters “would not serve any real commercial purpose” and “would be used solely for gambling.”
The court found no evidence Congress intended the CEA to preempt state sports gambling law.
Thirty tribal gaming organizations filed an amicus brief supporting Ohio’s position, warning that treating sports contracts as swaps could have far-reaching consequences for tribal gaming authority.
Tennessee Reached the Opposite Conclusion
The conflict with Tennessee makes the Ohio ruling particularly significant. In February, U.S. District Judge Aleta Trauger granted Kalshi a preliminary injunction against Tennessee regulators, finding the company was likely to succeed on the merits.
Judge Trauger concluded that a sporting outcome qualifies as an “event” under the statutory definition, and that sports contracts could therefore meet the definition of swaps.
The two rulings reflect genuinely different readings of the same federal statute. When courts within the same circuit reach conflicting conclusions on an identical legal question, it creates a circuit split that typically prompts the appeals court to intervene and establish a uniform standard.
A Growing Map of Conflicting Decisions
Ohio and Tennessee are not isolated cases. Federal courts in Maryland and Nevada, as well as state courts in Massachusetts, have ruled against Kalshi. A federal court in New Jersey granted the company a preliminary injunction in April 2025. Cases are also pending in New York and Connecticut.
The patchwork of conflicting outcomes means the legal status of sports event contracts varies depending on jurisdiction.
With multiple appeals now in progress, the Sixth Circuit will likely need to act. If it does, that ruling could either stabilize Kalshi’s national legal position or validate the state-by-state enforcement approach. Either way, the question may ultimately be significant enough to reach the U.S. Supreme Court.
Players trust our reporting due to our commitment to unbiased and professional evaluations of the iGaming sector. We track hundreds of platforms and industry updates daily to ensure our news feed and leaderboards reflect the most recent market shifts. With nearly two decades of experience within iGaming, our team provides a wealth of expert knowledge. This long-standing expertise enables us to deliver thorough, reliable news and guidance to our readers.
Latest News
