A federal court in Ohio rejected an attempt by Kalshi to block state regulators from enforcing gambling laws on sports-event contracts offered through its platform.
Chief Judge Sarah Morrison ruled that Kalshi failed to prove the contracts fell under the exclusive jurisdiction of the Commodity Futures Trading Commission.
“Even if this Court were to find that sports-event contracts are swaps subject to the CFTC’s exclusive jurisdiction, Kalshi has not shown that the Commodity Exchange Act would necessarily preempt Ohio’s sports gambling laws,”
The court wrote in its order.
The ruling allows the Ohio Casino Control Commission and the state attorney general to continue regulating sports-related contracts offered on the platform.
Kalshi had argued that the Commodity Exchange Act should override Ohio’s sports gambling laws because the contracts function as derivatives traded on a regulated exchange.
The decision also challenges comments made by Michael Selig, who previously said the federal agency held “exclusive jurisdiction” over prediction markets.
In response to the ruling, a Kalshi spokesperson said the company “respectfully disagree[d] with the Court’s decision” and plans to appeal, noting that a federal court in Tennessee recently reached a different conclusion.
The legal dispute comes as the CFTC prepares guidance on prediction markets, with Selig saying the regulator expects to provide clarity on the sector “in the very near future.”