Ohio gaming regulator wants to collect a $5m fine from Kalshi

Much has happened with Kalshi over the past weeks. The company has see-sawed between favorable and slightly less so court decisions in New Jersey and Arizona on the one hand, and Nevada, on the other. The company has even moved to preemptively restrict the Montana attorney general’s potential attempt to block it from offering its event contracts locally. The lawsuit, filed in court, also seeks to bar any such attempts by other officials.

However, in Ohio, the state Casino Control Commission (OCCC) has moved more quickly. It has issued a $5m fine to the platform, arguing that it has been operating without the necessary license. In a statement, the OCCC said that it continues to uphold its regulatory responsibilities seriously so that it can ensure that the local law and the integrity of sports gaming in the state are preserved. This argument comes at a time when Kalshi has vehemently insisted that its products do not constitute a form of sports wagering and that - even if that were true - the platform is regulated under the Commodity Futures Trading Commission’s remit, the CFTC. Kalshi’s refusal to stop offering sports gaming in Ohio necessitated the Commission to take action to uphold the requirements of Ohio law, the OCCC outlined in its latest enforcement action. Kalshi did try to have an injunction in place last month, barring such developments in Ohio, but ultimately failed, with a judge pointing out that the platform allowed users to be 18 years of age to register and trade, including sports event contracts.

In the meantime, Ohio AG Dave Yost took the latest OCCC’s move as a huge milestone for his office’s fight against the platform: Kalshi argued the federal Commodity Exchange Act preempts enforcement of Ohio law. Nope. These ‘prediction markets’ have exploded and look an awful lot like gambling. Big win for Ohio. Celebrating this early, though, may be unwise. Kalshi has faced even more serious threats, with the platform facing criminal charges in Arizona initially, before a federal judge decided that the case could not proceed. The CFTC has also taken offense at gaming regulators trying to preempt federal laws with local gaming laws instead, and has filed a counter-lawsuit against Arizona and other states that are currently trying to enforce their own laws against Kalshi and other prediction markets.