Ohio State Judge Denies Kalshi's Preliminary Injunction Request, Saying Federal Law Does Not Take Priority Over State Gambling Laws

Deep Tide TechFlow News, on March 11, reported that Chief Judge Sarah D. Morrison of the Southern District of Ohio dismissed the preliminary injunction request filed by prediction market platform Kalshi. Kalshi attempted to prevent Ohio regulators from enforcing state gambling laws on its event contracts.

In her ruling, the judge stated, “Historical evidence shows that Congress did not intend for federal law to take precedence over state sports betting laws.” Kalshi argued that its event contracts are regulated under the Commodity Exchange Act, enforced by the Commodity Futures Trading Commission (CFTC), and that federal authority should take precedence over state laws. However, the judge cited the legal context of the 2010 Dodd-Frank Act amendments, noting there is no evidence that Congress intended for the Commodity Exchange Act to supersede sports betting laws.

Last year, the Ohio Casino Control Commission accused Kalshi of operating illegal sports betting in the state. A Kalshi spokesperson said they would appeal and pointed out that this ruling contradicts a decision made a few weeks earlier by a federal court in Tennessee. The outcome of this case could impact the legal prospects of other prediction market platforms, including Polymarket.