Ohio Judge Rules Kalshi Must Follow State Gaming Laws, Dealing Blow to Prediction Markets

In a significant development for prediction markets, US District Judge Sarah D. Morrison ruled that the Commodity Exchange Act doesn’t override state gaming laws. This decision comes as part of an ongoing legal battle between Kalshi and the Ohio Casino Control Commission (OCCC) and state Attorney General Dave Yost.

Kalshi had argued that prediction market transactions should be treated as “swaps,” similar to those in traditional financial markets. However, Morrison disagreed, stating that swaps involve financial instruments that directly affect commodity prices. She noted that events like sports scores do not fit this criteria.

Following the ruling, a Kalshi representative told NBC News that the company would likely appeal the decision. Yost celebrated the ruling, asserting that companies like Kalshi and Polymarket are offering sports betting and circumventing state gaming laws. The New York Attorney General’s Office has already filed the Ohio federal court decision as “supplemental authority” in its own lawsuit with Kalshi, suggesting that more states may follow suit.