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The Ohio Casino Control Commission issued a notice of intent on 14 April to fine KalshiEX LLC $5 million for operating unlicensed sports gaming in the state — the most aggressive enforcement action any US regulator has taken against the prediction markets platform to date.
The Enforcement Action
The commission’s notice states that Kalshi has offered sports event contracts to Ohio residents continuously from approximately January 2025 through to the present, without holding a sports betting licence. It charges no Ohio state taxes on sports gaming revenues and has paid no licensing fees during that period.
The commission’s letter frames the fine as a direct consequence of Kalshi’s refusal to engage with the licensing process. “By continuing to operate without seeking licensure, Kalshi has effectively thwarted the Commission from investigating Kalshi’s (and its key employees’) suitability. 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,” the notice states.
Under state law, Kalshi has 30 days from the date of the notice to request a hearing on the proposed penalty.
Ohio Attorney General Dave Yost welcomed the action. “Ohio put Kalshi on notice today that its ‘prediction markets’ are unlawful gaming and proposed a $5 million fine,” Yost wrote on X. “A federal court already agreed with our reading of the law. I wouldn’t bet on how long Kalshi will be operating in Ohio.”
The Legal Background
The fine follows more than a year of escalating conflict between Kalshi and Ohio regulators. The commission issued a cease-and-desist order to Kalshi in March 2025, also targeting Crypto.com and Robinhood, requiring all three to stop offering sports event contracts in the state. Kalshi refused and filed suit in the US District Court for the Southern District of Ohio in October, seeking an injunction against the commission and the attorney general. The company argued its products constitute federally regulated swaps under the Commodity Exchange Act and are therefore beyond state jurisdiction.
In March 2026, US District Judge Sarah D. Morrison rejected that argument. Morrison ruled that the Commodity Exchange Act does not preempt Ohio’s sports gambling laws, and that treating sports results as equivalent to the commodity price inputs underlying traditional swaps would be “absurd.” She also denied Kalshi’s request for a preliminary injunction. The company said it would appeal.
In August 2025, the commission had written to Ohio-licensed sports betting operators warning that entering into commercial arrangements with prediction market platforms — even in other states — could affect their continued suitability for licensure in Ohio. That letter effectively blocked Kalshi from forming distribution partnerships with established operators in the market.
A Divided National Picture
Ohio is one of several states that have moved against Kalshi, but outcomes have been inconsistent across jurisdictions. Federal courts in Tennessee and New Jersey have blocked state enforcement actions against the platform. Courts in Massachusetts and Nevada have sided with state regulators. The Third Circuit Court of Appeals upheld in April a preliminary injunction shielding Kalshi from New Jersey’s cease-and-desist orders.
The most dramatic development came in Arizona, where Attorney General Kris Mayes filed 20 criminal charges against Kalshi on 17 March — the first criminal prosecution of a prediction market platform by any US state. A federal judge initially denied Kalshi’s request to block the case. The Commodity Futures Trading Commission then filed its own motion and secured a temporary restraining order on 10 April, preventing Arizona from pursuing the charges through at least 24 April. CFTC Chairman Michael Selig has framed the agency’s intervention as a defence of federal regulatory primacy. “Arizona’s decision to weaponize state criminal law against companies that comply with federal law sets a dangerous precedent,” he said in a statement following the ruling. The CFTC has filed parallel suits against Connecticut and Illinois.
Kalshi has not indicated it will withdraw from Ohio. The platform reported $1.3 billion in estimated annualised revenue from sports contracts according to the Financial Times, with sports-related activity accounting for approximately 90% of that figure. Its monthly active user base grew roughly 8.5 times between January 2025 and mid-February 2026, reaching 5.1 million users.
The Ohio fine notice adds a financial dimension to what has been primarily a legal and jurisdictional dispute. Whether Kalshi requests a hearing — and how Ohio proceeds if it does not — will be the next point of resolution in the state’s enforcement push.
For more on the broader prediction markets regulatory landscape, see Nevada Gaming Board sues Coinbase over unlicensed betting and Nevada court restraining order against Polymarket explained.
Source: Ohio Casino Control Commission
