The Ohio Casino Control Commission (OCCC) has imposed a substantial fine of $5 million on Kalshi, citing violations for unlicensed sports gaming operations within the state.
This penalty, disclosed on Tuesday, stems from the OCCC’s assessment that Kalshi’s sports event contracts closely resemble sports bets that licensed sportsbooks offer in Ohio, thereby necessitating a state license.
“We take our obligation to enforce compliance with the law and uphold the integrity of sports gaming in Ohio with utmost seriousness,” remarked the OCCC in their announcement.
Sports betting was legalized in Ohio in January 2023, with the OCCC responsible for licensing operators involved in casino gaming, sports betting, fantasy sports, and skill-based games. As per the commission’s findings, Kalshi has been operating sports-related contracts in the state since January 2025 without the necessary endorsements.
Kalshi, established in 2018 by two former MIT students, runs an online platform where users can trade on various outcomes, encompassing sports, elections, and global events. This platform is federally regulated by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market.
Legal Challenges Regarding State Regulation
Ohio regulators maintain that Kalshi’s sports event contracts operate similarly to the bets provided by licensed sportsbooks in the region.
In their notice of enforcement, the commission highlighted that Kalshi users place simple yes-or-no bets on sports results and receive payouts based on the accuracy of their positions. They also referenced Kalshi’s court documentation, which indicated that more than 35,000 consumers in Ohio are utilizing its services.
“By continuing its operations without seeking appropriate licensure, Kalshi has obstructed the Commission’s ability to evaluate both Kalshi and its key staff’s eligibility. Consequently, the Commission is left uninformed regarding Kalshi’s compliance with Ohio’s mandatory safeguard regulations,” stated the notice. “
OCCC Executive Director Matt Schuler emphasized that Kalshi’s promotional content reinforces the commission’s stance.
“Kalshi frequently markets its sports event contract offerings as ‘sports betting’ and draws comparisons to wagers provided by prominent sportsbooks,” Schuler elaborated. “Kalshi’s sports gaming options utilize classic wagering lingo such as spreads, totals, and props.”
Ohio Attorney General Dave Yost also referenced recent judicial decisions that corroborate the state’s jurisdiction.
“Ohio has notified Kalshi today that its ‘prediction markets’ constitute illicit gaming. A federal court has already concurred with our interpretation of the law. I wouldn’t place bets on how long Kalshi will continue to operate within Ohio,” Yost stated.
Today, Ohio issued Kalshi a notification that its “prediction markets” are considered unlawful gaming and has proposed a $5 million penalty. A federal court has concurred with our interpretation of the law.
I wouldn’t wager on how long Kalshi will maintain its operations in Ohio. pic.twitter.com/Gcw3GOTTlk
— Dave Yost (@DaveYostOH) April 14, 2026
Judicial Decisions Reveal Divergence Among Jurisdictions
The enforcement action from Ohio follows a ruling in March by US District Judge Sarah Morrison, who sided with state regulators in a lawsuit initiated by Kalshi aimed at blocking oversight of its sports contracts in Ohio.
Judge Morrison determined that the Commodity Exchange Act does not supersede Ohio’s authority to regulate what types of gambling are lawful within its territory.
Kalshi has asserted that it operates lawfully under federal jurisdiction and that its event contracts are in compliance with CFTC regulations.
“We are disheartened by this latest development, particularly in light of our ongoing legal battles with Ohio and favorable rulings from other courts affirming our operational rights as a federally licensed exchange,” Kalshi stated in response.
The company has experienced more favorable outcomes in other locations. A federal court in Arizona ruled that the state could not pursue illegal gambling accusations against Kalshi, while a court in Washington, DC, concluded that its contracts didn’t fall under the legal definition of gambling. Furthermore, New Jersey’s Third Circuit determined that state gaming regulators lacked jurisdiction over Kalshi.
Nonetheless, the scrutiny over sports-related prediction markets is intensifying across various states, with regulators and attorneys general contending that such products should be governed by state gaming laws.
A recent analyst note from Jefferies suggested that prediction markets may encounter further legal obstacles in federal courts moving forward, especially if cases escalate to the US Supreme Court.