A U.S. federal judge in Ohio has denied prediction market platform Kalshi’s request for a preliminary injunction against state regulators, ruling that the company must comply with Ohio gambling laws.
U.S. District Judge Sarah D. Morrison wrote that the Commodity Exchange Act does not override Ohio’s sports gambling regulations, rejecting Kalshi’s argument that its contracts should be treated as federally regulated financial instruments.
“History reveals no evidence that Congress intended to preempt state sports gambling laws,” Morrison wrote in her opinion.
New York-based Kalshi allows users to trade on outcomes of events ranging from sports and politics to global developments. The company argued that its sports event contracts should be considered “swaps,” similar to derivatives traded in financial markets.
Morrison rejected that argument, saying swaps are traditionally linked to factors that directly influence commodity prices.
“Currency exchange rates, the weather, and energy costs all do that; the number of points scored in the Huskies-Bobcats game does not,” she wrote.
The judge also argued that treating sports-event contracts as swaps would create illogical results.
“This conclusion is further supported by the Court’s obligation to avoid absurdity,” Morrison wrote, adding: “Ohio argues that absurd results would flow from defining a ‘swap’ to include a sports-event contract. The Court agrees.”
Ohio Attorney General Dave Yost welcomed the decision, saying the platform’s offerings resemble gambling.
“Kalshi argued the federal Commodity Exchange Act preempts enforcement of Ohio law. Nope,” Yost wrote on social media. “These ‘prediction markets’ have exploded and look an awful lot like gambling. Big win for Ohio!”
A Kalshi spokesperson said the company plans to challenge the ruling. “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,” the spokesperson said.
The case is part of a broader dispute between state regulators and federal authorities over how prediction markets should be governed. Platforms such as Polymarket have argued that their contracts fall under the jurisdiction of the Commodity Futures Trading Commission.
CFTC Chair Michael Selig has defended prediction markets, saying they provide economic value.
“They provide useful functions for society by allowing everyday Americans to hedge commercial risks, like increases in temperature and energy price spikes,” Selig said. “They also serve as an important check on our news media and our information streams.”
However, some lawmakers have expressed concern about their impact. Utah Gov. Spencer Cox (R) said prediction markets “are destroying the lives of families and countless Americans” and “have no place” in his state.
Courts have issued mixed rulings in similar disputes. Federal judges in Tennessee and New Jersey have sided with Kalshi in recent cases, while courts in Massachusetts and Nevada have ruled in favor of state regulators.
Sports gambling is legal in 39 states and the District of Columbia, with digital wagers permitted in 32 of those jurisdictions. Before the U.S. Supreme Court paved the way for legalized sports gambling in 2018, Nevada had been the lone state with legal sports betting.
Original article: https://www.yogonet.com/international/news/2026/03/11/118008-ohio-judge-rejects-kalshi-injunction-in-sports-prediction-markets-case
