BlockBeats News, March 11th, Chief Judge Sarah D. Morrison of the Southern District of Ohio Federal District Court ruled that there is no historical evidence to suggest that Congress intended federal law to take precedence over state sports betting regulations and, based on this, rejected the preliminary injunction request filed by the prediction market platform Kalshi.
Prior to this, Kalshi sued the Ohio Casino Control Commission in an attempt to prevent it from taking enforcement action against the platform’s event contracts under state gambling law. Last year, the regulatory agency accused Kalshi of operating illegal sports betting in Ohio.
Kalshi argued that its event contracts fall under the regulation of the Commodity Exchange Act as derivative transactions and should be overseen by the U.S. CFTC, thus federal regulation should take precedence over state gambling laws.
However, the judge stated that, based on historical and legislative context, there is no evidence to suggest that Congress intended for this law to supersede state sports betting regulations, noting that in 2010 when the Dodd-Frank Act amended relevant laws, the U.S. still broadly restricted sports betting.
Kalshi has indicated that they will appeal this ruling. The case is seen as a significant test of the legal status of prediction markets, and the outcome could affect the future compliance prospects of other prediction platforms, including Polymarket, in the United States.
