U.S. appeals court lets Ohio enforce gambling laws against Kalshi during appeal

The U.S. Court of Appeals for the Sixth Circuit has denied a bid by Kalshi to block Ohio from enforcing its sports gambling laws, allowing regulators to continue pursuing action against the company while its appeal proceeds.

In an April 24 order, a three-judge panel said Kalshi had not met the legal standard required for temporary injunctive relief, even as it acknowledged the case raises close legal questions about the boundary between federal and state authority.

“This split of authorities leaves no doubt that Kalshi has raised serious questions on the merits,” the panel wrote.

The judges added that the company’s arguments were not strong enough at this stage to justify halting enforcement. “At least at this stage, though, we find the preemption arguments largely in equipoise (if not favoring Ohio),” the panel said.

The ruling allows Ohio regulators to move forward with enforcement measures, including a proposed $5 million fine by the Ohio Casino Control Commission for allegedly operating an unlicensed sports betting platform.

At the same time, the panel ordered that Kalshi’s appeal be expedited, offering limited relief as the broader legal dispute continues.

The case is part of a wider battle over whether prediction market platforms fall under the exclusive jurisdiction of the Commodity Futures Trading Commission or can also be regulated by states under gambling laws.

Courts across the United States have issued conflicting decisions on whether the Commodity Exchange Act preempts such state regulation.

The Sixth Circuit’s stance could set up a clash with the U.S. Court of Appeals for the Third Circuit, which has taken a more favorable view of similar preemption arguments in a separate case.

The divergence between appellate courts could increase the likelihood of the dispute reaching the U.S. Supreme Court.

A federal judge had previously said that Kalshi is unlikely to succeed in its lawsuit against Ohio.

The panel comprised Senior Judge Alice M. Batchelder, Judge Eric E. Murphy and Judge Kevin G. Ritz.