BlockBeats news, March 11, Chief Judge Sarah D. Morrison of the U.S. District Court for the Southern District of Ohio ruled that there is no historical evidence indicating that the U.S. Congress intended federal law to preempt state sports betting regulations, and accordingly dismissed the preliminary injunction application filed by prediction market platform Kalshi.
Kalshi had previously sued the Ohio Casino Control Commission, seeking to prevent it from taking enforcement actions against the platform’s event contracts under state gambling laws. Last year, the regulator accused Kalshi of operating illegal sports betting in Ohio.
Kalshi argued that its event contracts constitute derivative trading regulated under the Commodity Exchange Act, which falls under the jurisdiction of the U.S. CFTC, and thus federal regulation should preempt state gambling laws.
However, the judge stated that from historical and legislative context, there is no evidence that Congress intended the law to override state sports betting regulations, noting that when the Dodd‑Frank Act amended relevant laws in 2010, sports betting was still widely restricted in the United States.
Kalshi indicated it will appeal the ruling. The case is seen as a significant test of the legal status of prediction markets, and its outcome may affect the compliance prospects of other prediction platforms, including Polymarket, in the United States going forward.
