The Ohio Casino Control Commission (OCCC) has imposed a hefty fine of $5 million on Kalshi, citing that the federally regulated prediction market has been conducting unlicensed sports betting within the state.
This penalty, announced on Tuesday, comes after the OCCC concluded that Kalshi's contracts for sports events closely resemble the bets provided by licensed sportsbooks in Ohio, thus necessitating a state license.
In a statement, the OCCC emphasized its commitment to regulatory compliance and maintaining the integrity of sports betting in Ohio.
Sports betting was legalized in Ohio in January 2023, with the OCCC responsible for licensing operators in various sectors, including casino gaming and fantasy sports. The commission revealed that Kalshi has been offering sports-related contracts in Ohio since January 2025 without the necessary approvals.
Founded in 2018 by two MIT students, Kalshi runs an online platform where users can trade on the outcomes of various events, such as sports and elections. This platform is federally regulated by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market.
Ohio regulators assert that Kalshi's contracts function similarly to bets from licensed sportsbooks. In their enforcement notice, they pointed out that Kalshi users engage in yes-or-no betting on sports results and receive payouts for correct predictions. The regulator also mentioned that Kalshi acknowledged in court documents that over 35,000 Ohio residents utilize its platform.
The notice further stated, “By continuing to operate without a license, Kalshi has hindered the Commission's ability to assess the suitability of Kalshi and its key personnel.” Consequently, the Commission is unaware of Kalshi's compliance with Ohio's legal safeguards.
Matt Schuler, the executive director of the OCCC, highlighted that Kalshi's own marketing materials support the commission's stance. He noted that Kalshi frequently refers to its contracts as 'sports betting' and likens them to wagers from major sportsbooks, using typical betting terminology like spreads and totals.
Ohio Attorney General Dave Yost pointed to a recent court ruling that affirmed the state's authority over such matters, stating, “Ohio has informed Kalshi that its prediction markets constitute illegal gaming. A federal court has already concurred with our interpretation of the law.”
The enforcement action from Ohio follows a March decision by US District Judge Sarah Morrison, who ruled in favor of state regulators when Kalshi attempted to block oversight of its contracts. Morrison determined that the Commodity Exchange Act does not override Ohio's jurisdiction to regulate gambling.
Kalshi maintains that its operations are lawful under federal regulations and that its event contracts comply with CFTC guidelines. In a statement, the company expressed disappointment over the recent developments, especially in light of ongoing litigation with Ohio and favorable rulings in other jurisdictions.
Kalshi has experienced more favorable outcomes in other states, including a ruling in Arizona that dismissed illegal gambling charges against the company, and a Washington, DC court that found its contracts did not constitute gambling under local law.