Judge Rules Kalshi is Subject to Ohio Sports Betting Laws

Kalshi picked up a massive loss in a federal court in the Buckeye State this week.

US District Court Judge Sarah Morrison delivered a ruling in a case between the Ohio Casino Control Commission (OCCC) and Kalshi. In it, she rejected the prediction market leader’s argument that sports contracts were a form of “swaps” instead of wagers. She referred to her refusal to accept the argument as “avoiding absurdity.”

The Ohio ruling comes just two weeks after a Tennessee judge accepted Kalshi’s argument over swaps. 

Judge Rules CEA Doesn’t Protect Kalshi

In her ruling, Judge Morrison claimed that granting Kalshi protection under the Commodity Exchange Act would devastate the sports betting industry.

Under Kalshi’s construction, a sports-event contract is a swap because it is a contract for payment based on the outcome of a sporting event. But if that is true, then all contracts for payment based on the outcome of a sporting event — all sports bets — would be forced onto DCMs [Designated Contract Markets] like Kalshi, and every sportsbook in the country would be put out of business. In the absence of congressional intent to effect such a sea change, that result is absurd.

Her words echo those of gambling regulators across the US, who believe prediction markets will devastate their legal sports betting markets. With DraftKings, Fanatics, and FanDuel all launching prediction platforms of their own, those fears could already be becoming a reality. 

Ohio AG Praises Ruling Against Kalshi

One of the first Ohio lawmakers to celebrate the favorable ruling was Attorney General Dave Yost. Kalshi had filed a lawsuit against him, claiming he was unfairly risking their business. 

Now, it appears Yost has been vindicated.

BREAKING: A federal judge today ruled that Kalshi is subject to Ohio sports betting law.

Kalshi argued the federal Commodity Exchange Act preempts enforcement of Ohio law. Nope.

These “prediction markets” have exploded and look an awful a lot like gambling. Big win for Ohio!

— Dave Yost (@DaveYostOH) March 9, 2026

Will the Ruling Matter?

While Kalshi is starting to pile up legal losses, there is a good reason for them to continue fighting. 

One reason for that is the support from the Commodity Futures Trading Commission and White House. They are helping to fight for the industry, hoping that some federal regulations will ease concerns in states with legal markets. 

Regardless of how the remaining rulings involving the prediction industry turn out, it seems all roads will lead to the US Supreme Court. Their ruling would give a massive boost to one industry but could decimate the other.