Ohio regulator imposes $5 million fine on Kalshi for unlicensed sports betting operations

The Ohio Casino Control Commission (OCCC) has issued a $5 million fine against Kalshi, saying the federally regulated prediction market operated unlicensed sports gaming in the state.

The fine, announced on Tuesday, follows the OCCC’s determination that Kalshi’s sports event contracts are substantially similar to sports wagers offered by licensed sportsbooks in Ohio and therefore require a state license.

“The Commission takes its regulatory responsibilities to ensure compliance with the law and the integrity of sports gaming in Ohio seriously,” the OCCC said in a release.

Ohio legalized sports betting in January 2023, with the OCCC overseeing licensing for operators across casino gambling, sports betting, fantasy sports, and skill-based amusements. According to the commission, Kalshi has offered sports-related contracts in Ohio since January 2025 without obtaining the required approval.

Kalshi, founded in 2018 by two Massachusetts Institute of Technology students, operates an online exchange that allows users to trade on event outcomes, including sports, elections, and current events. The platform is regulated at the federal level by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market.

Legal dispute over state oversight

Ohio regulators argue that Kalshi’s sports event contracts function in the same way as bets offered by licensed sportsbooks in the state.

In its enforcement notice, the commission noted that Kalshi users place yes-or-no wagers on sports outcomes and receive payouts when their positions are correct. The regulator also said Kalshi disclosed in court filings that more than 35,000 Ohio consumers use its platform.

“By continuing to operate without seeking licensure, Kalshi has effectively thwarted the Commission from investigating Kalshi's (and its key employees') suitability,” the notice said. “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.”

Matt Schuler, executive director of the OCCC, said Kalshi’s own promotional content supports the commission’s position.

“Kalshi’s marketing materials routinely describe its sports event contract offerings as ‘sports betting’ and compare them to bets offered by major sportsbooks,” Schuler said. “Kalshi’s sports gaming offerings utilize quintessential wagering terminology like spreads, totals, and props.”

Ohio Attorney General Dave Yost also pointed to a recent court ruling that backed the state’s authority.

“Ohio put Kalshi on notice today that its prediction markets are unlawful gaming. A federal court already agreed with our reading of the law,” Yost said. “I wouldn’t bet on how long Kalshi will be operating in Ohio.”

Ohio put Kalshi on notice today that its “prediction markets” are unlawful gaming and proposed a $5 million fine. A federal court already agreed with our reading of the law.

I wouldn’t bet on how long Kalshi will be operating in Ohio. pic.twitter.com/Gcw3GOTTlk

— Dave Yost (@DaveYostOH) April 14, 2026

Court rulings split across jurisdictions

The Ohio enforcement action follows a March ruling by US District Judge Sarah Morrison, who sided with state regulators after Kalshi sued to block oversight of its sports contracts in Ohio.

Morrison found that the Commodity Exchange Act does not preempt Ohio’s authority to decide what forms of gambling are permitted within its borders.

Kalshi has maintained that its exchange operates lawfully under federal oversight and that its event contracts are permitted under CFTC rules.

“We are disappointed in this latest development, especially considering our ongoing litigation with Ohio and recent rulings in other courts confirming our right to operate as a federally licensed exchange,” Kalshi said in a statement.

The company has secured more favorable outcomes elsewhere. A federal court in Arizona ruled the state could not pursue illegal gambling charges against Kalshi, while a court in Washington, DC, found that its contracts did not meet the legal definition of gambling in that case. New Jersey’s Third Circuit also said state gaming regulators did not have authority over Kalshi.

Still, legal scrutiny of prediction markets tied to sports has grown in several states, with regulators and attorneys general arguing that such products fall under state gaming laws.

A recent Jefferies analyst note said prediction markets may face more losses in federal courts in the coming years, particularly if disputes reach the US Supreme Court.