An Ohio judge has dismissed Kalshi's request for a preliminary injunction, leading to a significant divergence from a recent ruling in Tennessee regarding the classification of sports-event contracts under federal derivatives law versus state gambling regulations.
This ruling permits Ohio to enforce its sports betting laws against Kalshi while the legal proceedings are ongoing. It represents the latest chapter in the ongoing legal disputes between Kalshi and state gaming authorities over the jurisdictional authority concerning sports-event contracts.
Importantly, this decision introduces a conflict within the Sixth Circuit, where a federal court had previously sided with Kalshi in its case against Tennessee.
The conflict began in April 2025 when the Ohio Casino Control Commission (OCCC) issued cease-and-desist orders to various prediction market platforms, including Kalshi, Robinhood, and Crypto.com, claiming they were operating illegally by offering unlicensed sports betting.
In response, Kalshi filed a lawsuit against the OCCC and the Attorney General’s office in October, asserting that federal law supersedes Ohio’s regulatory efforts concerning its event contracts.
The company contended that the Commodity Exchange Act (CEA) grants the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over event contracts traded on federally sanctioned exchanges, such as Kalshi.
However, the court rejected this assertion. Chief Judge Sarah Morrison of the U.S. District Court for the Southern District of Ohio stated in her ruling: “The Court finds that Kalshi has not met its burden to demonstrate that the circumstances warrant such extraordinary relief; therefore, the Motion for Preliminary Injunction is DENIED.”
To obtain a preliminary injunction, a plaintiff must show a substantial likelihood of prevailing on the merits of the case.
The court also examined whether Kalshi’s sports event contracts could be classified as “swaps” under the CEA, which would place them solely under federal jurisdiction. Judge Morrison determined that these contracts likely do not meet the definition of swaps as outlined in federal derivatives law. She pointed out that federal derivatives markets typically involve financial factors such as commodities, currency rates, and weather conditions that have a direct impact on commercial pricing.
While Kalshi argued that contracts based on sports outcomes should be categorized as swaps, the court concluded that this interpretation extended the law beyond its intended application. Judge Morrison noted, “If Kalshi’s interpretation is accepted, then every contract for payment based on the outcome of a sporting event—essentially all sports bets—would need to be classified as swaps, which would jeopardize the viability of every sportsbook in the country.”
She further clarified that while factors like currency exchange rates and weather can influence financial markets, the score of a sports game does not fit this definition.
The ruling also took into account concerns raised by 30 tribal gaming organizations that submitted an amicus brief in the case.