Kalshi suffered a setback in its Ohio sports betting lawsuit after a federal court denied the company’s request for a preliminary injunction. The ruling lets Ohio regulators continue enforcing state gambling laws against the prediction markets platform while the case moves forward. Chief Judge Sarah D. Morrison of the U.S. District Court for the Southern District of Ohio issued the order on Monday.
The case focused on whether Kalshi’s sports event contracts fall under the exclusive authority of the CFTC or whether Ohio can regulate them under its own Ohio gambling laws. Kalshi argued that the federal Commodity Exchange Act gave the CFTC sole control over these contracts. However, the court said Kalshi failed to show that the law clearly blocked Ohio from acting.
That decision is important because Kalshi has used the same argument in other state fights over prediction markets and sports-related contracts. In Ohio, the court did not accept that position at this early stage. As a result, the company could not win emergency relief before the broader case is decided.
Kalshi and Ohio sports betting lawsuit turn on federal control
In its filing, the court said Kalshi had not shown that its sports event contracts were subject to the CFTC’s “exclusive jurisdiction.” The judge also said that even if the contracts were treated as swaps under federal law, Kalshi still did not prove that the Commodity Exchange Act overrides Ohio gambling laws. That point cut directly at Kalshi’s preemption argument.
The order stated,
“Kalshi fails to establish that Congress intended the CEA to preempt state laws on sports gambling.”
The court also wrote that federal inaction did not prove the contracts were allowed under the CEA. In other words, the judge said the lack of CFTC enforcement was not enough to show Kalshi’s markets were lawful in Ohio.
This part of the Ohio sports betting lawsuit matters because Kalshi had framed the dispute as a clear federal issue. Instead, the court treated the matter as unsettled and refused to block state action. Therefore, Ohio regulators can continue pressing their case that the platform’s sports contracts look like unlicensed sports betting.
Kalshi prediction markets face wider pressure beyond Ohio
Kalshi said it disagreed with the ruling and plans to appeal. A company spokesperson said the decision differs from a recent federal ruling in Tennessee, where a judge blocked state regulators from stopping Kalshi’s sports contracts while that case continued. That split adds more uncertainty to the legal fight around prediction markets and sports contracts in the United States.
The Ohio case is not the only challenge facing Kalshi. Reuters reported earlier this year that the company has also faced legal pressure in Tennessee, Massachusetts, and Nevada over similar claims tied to sports-related event contracts. These cases all turn on the same basic question: whether the products are federally regulated market contracts or state-regulated gambling activity.
At the same time, the CFTC may soon issue new guidance on prediction markets. Recent reports said CFTC Chair Michael Selig signaled that guidance could come in the near future, while the agency has also publicly defended its role over event contracts. That means the legal fight over Kalshi, the CFTC, and sports event contracts is still moving on several fronts at once.
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Tatevik Avetisyan is an editor at Kriptoworld who covers emerging crypto trends, blockchain innovation, and altcoin developments. She is passionate about breaking down complex stories for a global audience and making digital finance more accessible.
📅 Published: March 11, 2026 • 🕓 Last updated: March 11, 2026
