Kalshi has told the US Court of Appeals that the Ohio Casino Control Commission’s (OCCC) proposed $5m fine “underscores the need for an injunction.”
Legal counsel for the prediction market operator has described the OCCC’s recently threatened $5m sanction as “an extraordinary and regrettable step”.
The ongoing dispute began when the OCCC served a Kalshi cease-and-desist letter in April 2025, in which the regulator alleged that Kalshi had been operating unlawfully in the state since January 2025.
Kalshi did not comply and instead sued for a permanent injunction against the OCCC in October of that year.
In March, at the Ohio Southern District Court, Judge Sarah Morrison denied the motion, a decision that Kalshi immediately appealed.
In its latest filing, Kalshi advises that the OCCC is now attempting to rush through its punitive action before the Court of Appeals has been able to rule on the case.
Judge Morrison’s ruling
A need for the court to avoid ‘absurdity’ formed part of Judge Morrison’s reasoning in rejecting Kalshi’s motion for injunctive relief.
The District Court stated that the prediction market operator had failed to establish that the circumstances demanded the ‘extraordinary relief’ an injunction would have provided.
Kalshi’s arguments that federal commodities law pre-empted state regulations and that it faced irreparable injury if forced to geoblock its product were found to be “overstated” and “dwarfed” by Ohio’s interest in upholding its laws.
The notice of intention
That verdict was filed by Judge Morrison on 9 March and preceded a letter from OCCC Executive Director Matthew Schuler, notifying Kalshi of the authority’s intention to levy the $5m fine.
This notice was delivered to Kalshi’s legal team on 14 April and alleged the operation of sports gaming without a licence, failure to cooperate with the commission, and the undermining of public confidence and integrity of sports gaming in Ohio.
In support of this letter, State Attorney General Dave Yost referred back to Morrison’s verdict, posting 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.”
Hobson’s choice
Nonetheless, the case in Ohio is not closed and it will be heard by the Sixth Circuit.
The OCCC’s decision not to wait for a ruling on any appeal has been characterised by Kalshi as “drastic action”.
The operator claims the state regulator is forcing it into a “Hobson’s choice of either violating state law and facing millions of dollars in liability or obeying its preempted law throughout the appeal.”
Kalshi posits that, were the example followed by other states, it would lead to “total chaos”.
That will now be a question for the Court of Appeals.