Kalshi Sues Ohio Gambling Regulator Over Legality of $5 Million Fine
Jesse M. Cox Published 03/07/2026
Kalshi has filed suit in an Ohio state court against the Ohio Casino Control Commission (OCCC). The prediction market site is seeking to block a proposed $5 million fine that the OCCC issued it. Lawyers for Kalshi are arguing that the state gambling regulator lacks the constitutional authority to impose such a penalty through an administrative proceeding without first going through the procedure of a jury trial.
Kalshi's representatives insist that the company is being denied the right to a fair trial. The OCCC is seeking to impose a $5 million civil penalty against Kalshi for its offering of unlicensed sports betting.
Kalshi is demanding its right to a trial by jury
Lawyers for Kalshi filed a complaint in the Franklin County Court of Common Pleas. Counsel for Kalshi notes that the OCCC's attempt to impose a $5 million civil penalty against the company violates Kalshi's right to a trial by a civil jury under the Ohio Constitution. They further argue that the actions of the OCCC warrant a permanent injunction, according to postings on X from prominent gambling attorney Daniel Wallach.
"The Commission’s administrative proceeding affords no right to a civil jury," the court filing reads. "This violates Kalshi’s right to trial by jury under Article I, Section 5 of the Ohio Constitution and transgresses the separation of powers embedded in Article II, Section 1 of the Ohio Constitution."
Counsel for Kalshi is also asking the court to make a declaratory judgment that Ohio has violated state laws.
“Kalshi is entitled to a permanent injunction enjoining the Commission from enforcing RC Chapter 3775 against Kalshi, and a declaration that (1) the enforcement of a statutory penalty under RC Chapter 3775 must occur in a forum that affords a jury, and (2) that RC Chapter 3775 fails to provide an intelligible principle for imposing a statutory penalty, such that RC Chapter 3775 may not be utilized as a basis for imposing civil penalties upon Kalshi,” the filing reads.
Kalshi vs Ohio is a long-running legal battle
Ohio was among the first states to set out to challenge the suggestion that sports-event contracts offered by prediction market sites were actually illegal sports betting. In March 2025, the OCCC issued a cease and desist order to Kalshi and other prediction market sites. This was based on the accusation that these sites were offering unlicensed sports betting. In August 2025, the state regulator was cautioning sports betting sites operating in the state that their operator's licenses could be in jeopardy if they become involved in offering sports-event contracts.
Kalshi decided to counter the OCCC's actions. In October 2025, the prediction market site filed suit against the OCCC and Ohio Attorney General Dave Yost. Lawyers argued that Ohio was threatening to prohibit the trading of event contracts. It was at this juncture that the OCCC hit Kalshi with the $5 million fine.
Then, in March 2026, Federal Judge Sarah Morrison denied Kalshi's petition for a preliminary injunction against Ohio. She determined that sports-event contracts weren't swaps, as the prediction market sites claimed. Kalshi appealed this ruling to the Sixth Circuit Court. The rejection of that appeal came in April.
The outcome of this case could have far-reaching effects
If the $5 million fine issued against Kalshi by the OCCC is allowed to stand, the impact across the USA could prove devastating to prediction market sites. It's much easier and less costly for state regulators to impose fines against these sites. Waging long, drawn-out court battles is cost-prohibitive.
Kalshi is also facing legal action in five other states - Michigan, Illinois, Minnesota, Kentucky, and New Mexico. The company needs a win in federal court. They need a legal ruling that the Commodities Futures Trading Commission (CFTC), the federal regulator of prediction markets, supersedes any state regulator.