Kalshi, a digital platform for event-based predictions, has initiated legal action against Ohio regulators as well as the state’s attorney general, claiming that their efforts to restrict its operations within the state represent an infringement of regulatory boundaries.
The firm, which facilitates the trading of event contracts tied to real-life occurrences, including sporting events, lodged a complaint on October 7 in the U.S. District Court for the Southern District of Ohio. The lawsuit targets the Ohio Casino Control Commission and Attorney General Dave Yost’s office, alleging that their actions have dissuaded other companies from working with the platform.
Kalshi’s business model revolves around “event contracts,” which the company argues are fundamentally different from traditional sports betting. The lawsuit contends that the Commission’s measures, including a cease-and-desist order issued earlier this year, threaten Kalshi’s partnerships with leading sportsbooks and service providers.
Legal documents reveal that the commission has cautioned other licensed operators that collaborating with Kalshi, even outside Ohio, could result in punitive actions, such as revocation of licenses.
“If enforced, the Casino Commission’s warning to these brokers would sever Kalshi’s access to millions of potential users and essential partners, increasing the significant damages Kalshi anticipates from the Commission’s unlawful regulation attempts,” reads the complaint.
The company claims it has spent months in discussions with Ohio officials seeking to clarify its legal position and avert any conflict. However, the regulators assert that Ohio law grants them complete authority over sports betting activities within the state, irrespective of Kalshi’s federal regulatory claims.
On October 6, the Ohio Casino Control Commission reiterated its position in a communication to Kalshi. “The Commission remains unconvinced that Ohio law is superseded by federal law as Kalshi asserts. Therefore, if Kalshi persists in offering unlicensed and unregulated sports betting through sporting event contracts in Ohio, it will be in violation of state law,” wrote Matthew Schuler, the Executive Director of the commission.
Currently, legal sports betting in Ohio is restricted to operators holding a valid license provided by the state. Kalshi does not possess such a license, and its operations have been classified as unregulated by Ohio authorities.
In June, the Ohio Attorney General’s office aligned with over 30 other state attorneys general in a federal court brief opposing Kalshi’s initiatives in New Jersey. “Dismantling states’ authority to regulate online sports betting presents grave risks to their citizens,” indicated the statement from Yost’s office.
Kalshi is pursuing a federal injunction to prevent the state from enforcing measures that would hinder its operations. The company has requested the court to intervene before October 20, the date it anticipates state authorities may escalate their actions against its platform.