Kalshi appeals court ruling amid Ohio crackdown on prediction markets

Kalshi has requested that the full Sixth Circuit Court of Appeals reconsider a September ruling that favored sports regulators in Ohio and Tennessee. The previous decision allowed these states to enforce gambling laws against Kalshi’s sports contracts, finding that the company failed to prove its contracts qualify as swaps and that federal commodities law does not override state gambling regulations.

In Ohio, the Casino Control Commission issued cease and desist letters to ten companies, including Polymarket, Robinhood, and Coinbase, regarding their event contracts. Regulators allege these platforms are facilitating illegal sports betting by avoiding the permits, fees, and taxation required of traditional sportsbooks. The commission stated that offering these contracts to Ohio residents violates state civil and criminal laws.

This legal conflict occurs as the Commodity Futures Trading Commission (CFTC) has proposed new rules to include event contracts—covering sports, politics, and weather—within the federal definition of a swap. Meanwhile, some targeted companies have become significant political donors, with Coinbase contributing $33.2 million to the Fairshake super PAC.