Ohio Federal Court Denies Kalshi Injunction Creating Intra Circuit Split Over Sports Prediction Markets

A federal court in Ohio has denied Kalshi’s injunction, creating a Sixth Circuit split over whether sports event contracts are gambling or federal derivatives.

By: AXL Media

Published: Mar 10, 2026, 11:27 AM EDT

Source: The information in this article was sourced from Gambling Insider

A Critical Halt to Prediction Market Expansion

A federal judge in Ohio has officially denied a preliminary injunction sought by Kalshi, effectively permitting state authorities to enforce local gambling prohibitions against the platform while litigation continues. Chief Judge Sarah Morrison ruled that the exchange failed to meet the high burden required for such extraordinary legal relief. This development stems from a broader conflict initiated in April 2025 when the Ohio Casino Control Commission issued cease and desist orders to several major prediction platforms.

Challenging the Definition of Financial Swaps

The central legal friction in this case involves whether Kalshi’s sports event contracts qualify as swaps under the Commodity Exchange Act. While Kalshi maintains that these instruments are federal derivatives under the exclusive jurisdiction of the Commodity Futures Trading Commission, the Ohio court expressed significant skepticism. Judge Morrison noted that unlike traditional financial variables like currency or weather, the scoring of a collegiate athletic game does not serve a broad commercial pricing purpose.

Protecting the Existing Regulatory Framework

The ruling emphasized that adopting Kalshi’s broad interpretation of federal law could potentially classify all sports betting as federal swaps, which would fundamentally disrupt the domestic gambling industry. This perspective was bolstered by an amicus brief from 30 tribal gaming organizations, who argued that federal preemption would undermine their sovereign authority to regulate gaming on tribal lands. The court found that such a seismic shift in regulatory power lacked any clear evidence of congressional intent.