Kalshi challenges Ohio over proposed $5M regulatory fine
Kalshi is stepping up its fight with Ohio regulators, blasting a proposed $5 million fine as an “extraordinary and regrettable step” in a fresh court filing.
Lawyer William E. Havemann of Milbank LLP sent the April 15 letter to the U.S. Court of Appeals for the Sixth Circuit. It’s part of Kalshi’s push to secure an injunction while it continues appealing a broader dispute over how its event-based trading platform should be regulated.
Kalshi dispute escalates after Ohio regulatory fine
Tensions spiked a day earlier when the Ohio Casino Control Commission issued a notice accusing Kalshi of running unlicensed sports gaming operations. Regulators signaled they intend to move forward with a $5 million civil fine.
State officials say Kalshi has been offering what it calls “sports event contracts” to Ohio users since at least January 2025. In their view, those contracts function no differently than traditional sports bets, placing them squarely under Ohio’s gaming laws.
The Commission has already been warning both sportsbooks and prediction market platforms about crossing regulatory lines, stating that any product resembling wagering must be licensed and follow state rules.
Kalshi sees things very differently. In its latest filing, the company argues Ohio is acting too soon, before courts settle whether these contracts fall under federal oversight. The company maintains that the Commodity Futures Trading Commission has primary authority, not individual states.
Calling the proposed penalty “extraordinary and regrettable,” Kalshi said the state is “rush[ing] to impose an unprecedented fine” before the appellate court has even ruled on its injunction request.
This builds on Kalshi’s earlier federal lawsuit against the Commission, where it claimed Ohio was overstepping and interfering with federally regulated markets.
Kalshi also warned that the situation leaves it stuck in a legal bind. In court papers, the company described facing a “Hobson’s choice”: either follow state rules it believes don’t apply or keep operating and risk major financial penalties.
The filing goes further, cautioning that if states act independently, businesses could face a confusing mix of rules nationwide. Kalshi described that scenario as the kind of “total chaos” federal oversight was meant to prevent.
Ohio regulators, however, are holding firm. They argue Kalshi’s contracts allow users to wager on outcomes like game results or player performance, using pricing structures that mirror betting markets. They say it triggers licensing requirements along with consumer protections, tax obligations, and responsible gaming safeguards.
Officials have also raised concerns about platform access and compliance standards. Kalshi now has 30 days to request an administrative hearing while its federal appeal continues.
Featured image: Kalshi / Canva
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