DeWine says Ohio will enforce gambling laws against Kalshi sports contracts

Ohio Gov. Mike DeWine said the state would enforce its gambling laws against Kalshi’s sports-event contracts, describing prediction markets that trade on sporting outcomes as illegal gambling rather than a distinct financial product.

Speaking Oct. 2, DeWine said changing the label did not change the character of the activity. “We will certainly enforce the law,” he said, adding that Kalshi should follow the same rules as other sports-betting operators.

His comments followed a Sept. 25 decision by the Sixth U.S. Circuit Court of Appeals allowing Ohio to proceed with enforcement while Kalshi’s challenge continues. As we reported last month, the Sixth Circuit also allowed Tennessee to enforce its gambling laws against Kalshi during the underlying litigation.

The appeals court affirmed the Southern District of Ohio’s refusal to grant Kalshi a preliminary injunction. It also vacated a preliminary injunction that had barred Tennessee enforcement. The decision did not impose a penalty on Kalshi or finally determine the legality of every sports contract it offers.

Kalshi had argued that its contracts were swaps traded on a federally regulated designated contract market, putting them under the Commodity Futures Trading Commission’s exclusive jurisdiction. The Sixth Circuit found that Kalshi had not shown its sports-event contracts qualified as swaps under the Commodity Exchange Act.

Even if they were swaps, the court held, the federal statute did not expressly or implicitly preempt Ohio and Tennessee gambling laws. The court pointed to the Commodity Exchange Act’s savings clause, which preserves state regulatory authority unless the law provides otherwise.

Kalshi began offering sports-event contracts on Jan. 22, 2025, after self-certifying them with the CFTC. Its platform lets participants buy and sell event contracts whose payoffs depend on specified events, occurrences or values.

Ohio’s Casino Control Commission has maintained that those sports contracts constitute unlicensed sports betting. It ordered Kalshi either to halt the offering or obtain a state licence and comply with related regulation, including Ohio’s 20% sports-betting tax.

On April 14, the commission issued a notice of intent seeking a $5 million civil penalty for alleged unlicensed sports gaming. The notice was not a final agency determination and gave Kalshi 30 days to request a hearing.

The commission alleged that Kalshi had acknowledged more than 35,000 Ohio consumers had used its platform. It also alleged that the company made contracts available to people aged 18 to 20, although Ohio generally limits sports gaming to people aged 21 or older, and cited alleged shortcomings in its voluntary-exclusion programme, advertising compliance and tax payments.

Kalshi has countered that a state-by-state system is unworkable. Dani Lever, a company spokesperson, said: “Markets can’t operate when the rules change at every state line, which is why Congress created a single federal regulator with nationwide rules.” The CFTC supported that position in a May court filing, arguing that the contracts were federally protected swaps and that federal law blocked Ohio from applying its gambling laws.

The Sixth Circuit’s result differs from the Third Circuit’s April decision protecting Kalshi from New Jersey enforcement, while the Ninth Circuit reached a comparable preliminary conclusion to the Sixth Circuit in Nevada. New Jersey’s petition asking the U.S. Supreme Court to review the Third Circuit ruling remained pending as of Oct. 1.