Ohio’s gaming regulator has upped the ante on Kalshi by announcing that it intends to fine the prediction market platform $5m.
The Ohio Casino Control Commission (OCCC) sent a notice of intent to the company stating that it plans to levy the civil penalty because Kalshi is offering sports event contracts that, in the eyes of the regulator, are equivalent to unlicensed sports gaming in Ohio.
“Kalshi’s ‘sports event contract’ offerings specifically enable Ohio consumers to wager or bet on uncertain outcomes of sporting events like professional and collegiate games and the individual performance statistics of athletes,” said the OCCC in its notice to Kalshi.
Ohio’s gaming regulator accused Kalshi of facilitating unlicensed sports betting in the state since January 2025. The OCCC added that it is “charged with ensuring the integrity of sports gaming in the State of Ohio” and has jurisdiction over all sports gaming. As such, the OCCC believes it has the authority to penalize Kalshi as the company does not hold a gaming license in Ohio.
OCCC previously sent C&D to Kalshi
The OCCC is stepping up its attempted enforcement action against Kalshi after it sent a cease-and-desist order to the firm last April, demanding that the prediction market stop offering sports event contracts in the state. Despite the C&D order, Kalshi continued to offer sports event contract trading to residents and visitors in Ohio.
“Based upon the foregoing, and pursuant to Ohio law, Kalshi is subject to administrative action for operating or conducting sports gaming without a license, failing to cooperate with the Commission (which includes failing to abide by the Commission’s cease and desist order and failing to provide the Commission with the information it requested), and engaging in conduct that undermines the integrity, or public confidence in, sports gaming in Ohio,” said the OCCC in its notice to the prediction market.
In addition to Kalshi, the OCCC sent C&D orders to Robinhood and Crypto.com.
“By continuing to operate without seeking licensure, Kalshi has effectively thwarted the Commission from investigating Kalshi’s (and its key employees’) suitability,” added the OCCC. “As a result, the Commission also lacks awareness of whether, or to what extent, Kalshi adheres to the various safeguards and guardrails that Ohio law requires.”
Kalshi’s willingness to continue operating in Ohio led to the OCCC’s decision to send the notice of intent to fine the operator. The commission also accused Kalshi of failing to adhere to state gaming requirements by allowing users 18 to 20 years old to trade sports event contracts on the platform. The regulator also takes issue with Kalshi not paying Ohio state taxes on sports gaming receipts and for withholding “unpaid family support obligations or other state debts from consumers’ sports gaming winnings”.
Kalshi and Ohio AG respond to OCCC’s fine notice
Kalshi has the opportunity to schedule a hearing on the OCCC’s notice of intent. The prediction market is required to request a hearing within 30 days of receiving the notice.
“We’re reviewing the letter and will protect our interests to the maximum extent provided by the law,” Kalshi Head of Communications Elisabeth Diana posted on social media site X. “Disappointing, considering 1) our ongoing litigation with the state and 2) recent rulings in other courts confirming our right to operate as a federally licensed exchange.”
In contrast, Ohio Attorney General Dave Yost commended the OCCC’s action and believes Kalshi’s days in Ohio could be numbered:
Kalshi sued the OCCC
As referenced by Diana and Yost, Kalshi and Ohio are embroiled in a legal dispute with Kalshi, which sued OCCC Executive Director Matt Schuler and Yost in federal court last year following the gaming regulator’s C&D order.
In the suit, Kalshi accuses Yost and the OCCC of acting unlawfully by threatening enforcement action against its delivery of sports event contracts. Kalshi argues that the Commodity Exchange Act provides the Commodity Futures Trading Commission with exclusive authority to regulate event contract trading, even on sports event contracts.
Kalshi is also taking issue with the OCCC’s warning to Ohio gaming license holders that prediction market partnerships could put their licenses in jeopardy, even if those deals do not directly include event contract operations in the Buckeye State.
Kalshi sought a preliminary injunction in its suit against Yost and the OCCC, which was denied by a federal court judge. The judge said Kalshi failed “to make a clear showing that it is entitled to the extraordinary preliminary injunctive relief it seeks”. Kalshi failed to show how its sports event contracts fall under the purview of the CFTC’s exclusive jurisdiction.
The prediction market also failed to establish the likelihood of its success on the merits, found the judge. A preliminary injunction would have allowed Kalshi to offer sports event contracts in Ohio as the case progresses. Kalshi is included in similar lawsuits in numerous other states.
