Washington, Mar 12: A US federal judge in Ohio has ruled that sports prediction contracts offered by New York-based platform Kalshi amount to gambling and therefore fall under state regulatory oversight.
US District Judge Sarah Morrison on Monday denied Kalshi’s request for an injunction against the Ohio Casino Control Commission, which had argued that the company was effectively operating as an “unlicensed sportsbook” in the state.
Kalshi had sought to block Ohio authorities from enforcing state gambling laws against its sports-event prediction contracts.The company maintained that its products should be treated as federally regulated financial instruments, similar to swaps overseen by the US Commodity Futures Trading Commission (CFTC).
Kalshi argued that its contracts are comparable to swaps linked to measurable outcomes such as weather conditions or energy prices.However, Judge Morrison rejected the argument, observing that traditional swaps involve instruments tied to commodity prices.
She noted that outcomes such as the number of points scored in a sporting event do not fall within that framework.
Ohio Attorney General Dave Yost welcomed the ruling, saying the prediction market contracts offered by Kalshi resemble gambling activities.Kalshi’s approach mirrors earlier efforts by prediction market platforms such as Intrade and PredictIt, which have sought to present their services as financial forecasting tools rather than betting platforms.
Regulators have often leaned toward classifying such products as gambling.Legal experts say that without clear federal preemption, prediction market operators could face varying regulatory decisions across US states.Despite the ruling, Kalshi said it plans to appeal the decision.
A company spokesperson said the firm disagrees with the court’s ruling and pointed to a recent legal victory in Tennessee, where a court blocked local authorities from imposing certain state regulations on the platform.
Kalshi has been involved in multiple legal disputes in recent months with state regulators, tribal authorities and private plaintiffs. The company maintains that prediction markets serve as tools for forecasting and risk management rather than entertainment-based gambling.
