Kalshi pushes appeals court to halt Ohio crackdown on trading markets
Kalshi is moving quickly to stop Ohio regulators from cracking down on its platform, asking a federal appeals court to step in before the situation escalates further.
In a March 24 emergency filing seen by ReadWrite, the company told the US Court of Appeals for the Sixth Circuit it faces “an imminent risk of civil or even criminal enforcement in Ohio” after a lower court refused to shield it earlier this month.
The earlier decision, issued March 9, denied Kalshi a preliminary injunction. Now the company wants the appeals court to pause any state action while it challenges that ruling.
Kalshi continues to seek emergency block at Ohio appeals court
Kalshi maintains that its contracts fall squarely under federal oversight through the Commodity Futures Trading Commission. Because of that, it argues, Ohio has no authority to treat its offerings as gambling.
The company points to the Commodity Exchange Act, which grants the CFTC “exclusive jurisdiction” over federally approved exchanges. “Federal law accordingly preempts state regulation of trading on Kalshi,” the company argues, adding that Congress intended to “preempt the field” of futures and derivatives regulation.
The Ohio Casino Control Commission, on the other side, sent Kalshi a cease-and-desist letter in March 2025, claiming its sports-event contracts violate state gambling laws. State officials have also leaned on arguments raised in a similar Massachusetts case, where regulators challenged whether prediction markets resemble unlicensed betting.
Kalshi fired back with a federal lawsuit, saying its platform operates as a regulated exchange where users trade on real-world outcomes, not place traditional bets. It argues those contracts qualify as “swaps” because payouts hinge on “the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence.”
The company warns that if Ohio is allowed to proceed, other states could follow with their own rules, creating “a patchwork of contradictory regulation” and even “total chaos.”
The legal landscape is already uneven. A federal judge in Tennessee recently sided with Kalshi, granting an injunction and finding the company was likely to win on its federal preemption argument. But the Ohio court reached the opposite conclusion, allowing enforcement to continue.
Kalshi says that split leaves it stuck between conflicting obligations. Ignoring Ohio could expose it to enforcement, while complying could mean “irreparable reputational harm,” “massive compliance costs,” and potential violations of federal requirements.
The company says it has more than 35,000 users in Ohio and currently does not block access by location, meaning it would need to build new systems to comply.
The CFTC has backed Kalshi’s wider position in related cases, warning that states “cannot invade the CFTC’s exclusive jurisdiction” by treating exchange-traded contracts as gambling.
Featured image: Kalshi / Canva
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