A notice of intent to impose a civil penalty or fine on KalshiEX LLC was issued on April 14 by the Ohio Casino Control Commission. This notice is still not a final decision, since Kalshi is entitled to request a hearing on the issue within thirty days. However, this is a sign that Ohio has taken its fight against the company to another level, since it is not just demanding that it stop offering those contracts in Ohio but seeking to impose a penalty.
Why Ohio Says Kalshi Is Running Sports Betting
According to the commission, the sports event contracts offered by Kalshi are essentially bets on unpredictable sporting events. These contracts are subject to the state’s sports gaming law. The notice says that Kalshi has been providing such contracts in Ohio since January 2025 via its website and mobile application. Among other things, it refers to betting markets for professional and collegiate matches, athlete statistics, point spreads, totals, prop bets, and a “Combos” option that is similar to a same-game parlay in Ohio.
In addition, the commission claims that Kalshi has been able to sidestep the licensing regime that any legitimate online platform in Ohio must go through. According to the notice, a legally-operating online betting service would be required to have a valid license from the state, incur at least a non-refundable payment of $1.5 million towards its service provider license, and function within the overall regulatory system of Ohio. Regulators say this is the reason why Ohio is unable to assess suitability and ensure security.
After that, the state of Ohio elaborates further on the situation. The notice says that Kalshi admitted in court documents that more than 35,000 users from Ohio access the platform. Additionally, the it states that the company provides sports betting products to individuals between 18 and 20 years old, uses a voluntary exclusion program that is less broad than Ohio’s Time Out policy, advertised its product as “a side hustle” or “money hack,” and does not pay the tax for Ohio sports-gaming.
The Cost of the State Pushback Is Rising
Kalshi argues that its products are not gambling and the company operates under federal regulation by the Commodity Futures Trading Commission. This has created a tangled judicial landscape. While, in Ohio, U.S. District Court Judge Sarah Morrison rejected Kalshi’s bid for preliminary injunctive relief in March. The Third Circuit determined on April 6 that New Jersey cannot prohibit Kalshi’s sports event contracts since the CFTC has exclusive jurisdiction over swaps conducted on a licensed designated contract market.
This is why the Ohio case is significant beyond the borders of a single state. According to Financial Times, Kalshi’s annualised revenue from contracts involving sports had climbed to $1.3 billion, accounting for up to 90% of its fee structure.
Once states start adding large fines to cease-and-desist orders, the issue stops being just about who regulates these products. Whether Kalshi can continue expanding while simultaneously defending itself against expensive litigation is a pressure point for the provider now.
