Kalshi, a predictive betting platform, is suing the Ohio Casino Control Commission (OCCC) and the state’s Attorney General’s office, asserting that their actions have overstepped the bounds of state authority and hindered its ability to operate legally. Filed on October 7, 2025, the lawsuit seeks to prevent the state from imposing restrictions that would disrupt Kalshi’s business relationships and operations in Ohio. The platform, which offers users the ability to place bets on real-world events, including sports, has been embroiled in ongoing legal conflicts with various state regulators.

Kalshi’s Legal Challenge

The core of Kalshi’s lawsuit revolves around its claim that the Ohio regulators are unlawfully attempting to prevent the platform from engaging with sports betting operators in the state. Kalshi, which is federally regulated by the Commodity Futures Trading Commission (CFTC), argues that federal law should preempt state regulations concerning sports betting. The company’s lawsuit points to the Ohio Casino Control Commission’s cease-and-desist letter issued to Kalshi in early 2025, warning licensed sportsbooks in Ohio that they could face consequences for partnering with Kalshi. This letter has caused considerable unease among potential business partners, with Kalshi claiming it would lose access to millions of users and key operators if the state’s actions are enforced.

Kalshi has been actively working to resolve its legal issues through communication with Ohio state officials. However, despite several months of back-and-forth discussions, the state has maintained its stance, asserting that federal law does not override the state’s right to regulate sports gambling. The lawsuit, filed in the U.S. District Court for the Southern District of Ohio, seeks a federal injunction to stop Ohio from taking further actions against the platform and to allow Kalshi to continue operating in the state without interference.

According to The Columbus Dispatch, Ohio’s Attorney General, Dave Yost, has been a key figure in the legal battles against Kalshi. In addition to supporting Ohio’s stance in its dealings with the platform, Yost has also taken action in other states to challenge Kalshi’s operations. In June 2025, his office filed a brief in a New Jersey federal court, joining forces with other state attorneys general in an attempt to regulate Kalshi’s activities across the nation. The brief expressed concerns about the potential dangers of allowing unregulated sports betting platforms to operate without state oversight.

The OCCC, led by Executive Director Matthew Schuler, argues that Kalshi’s offering of “sports event contracts” violates Ohio’s gambling laws, which stipulate that sports betting can only be conducted through licensed operators. In an October 6 letter, Schuler made it clear that Kalshi’s operations would be considered illegal if they continued without the appropriate licensing from the state.

Kalshi’s Business Impact and Response

Kalshi’s lawsuit highlights the significant financial and reputational damage it claims to have already suffered due to the OCCC’s threats to its business relationships. The complaint asserts that the OCCC’s warnings to sportsbooks and vendors have created a chilling effect, deterring potential partners from engaging with Kalshi for fear of facing penalties or losing their licenses. Kalshi’s operations depend on collaborations with sportsbooks, and any disruption to these partnerships could severely harm its ability to operate.

The company is seeking an injunction to prevent the state from enforcing these restrictions starting October 20, 2025, the date Kalshi expects to continue offering its betting platform. Kalshi also hopes the legal action will help clarify whether the platform’s federally-regulated prediction markets fall within the jurisdiction of state gambling laws.

Kalshi is not only facing issues in Ohio. The platform has also been involved in lawsuits with multiple other states, including Massachusetts, Nevada, and New Jersey, where state authorities have raised concerns over the legality of Kalshi’s sports betting offerings. In September, the Massachusetts Attorney General filed a lawsuit accusing Kalshi of operating an illegal gambling operation. Similarly, the Ho-Chunk Nation filed its own lawsuit against Kalshi, arguing that the platform operates in violation of tribal gaming regulations.

Despite the legal hurdles, Kalshi continues to expand its operations, having recently raised significant funding that valued the company at $2 billion. The company has also hired several prominent figures from the gaming and betting industries, signaling its commitment to scaling its business amid regulatory challenges.

Kalshi offers users the opportunity to place bets on real-world events, including sporting events, through its unique “event contracts.” These contracts allow users to predict the outcomes of various events and place financial stakes on those predictions. Kalshi’s model, which is regulated by the CFTC, differs from traditional sports betting platforms, which are typically regulated by state gaming commissions.

However, the OCCC and other state regulators argue that Kalshi’s model resembles gambling and should be subject to state laws governing sports betting. Kalshi’s legal team contends that the platform operates as a prediction market, not as a traditional gambling service, and should therefore be exempt from state regulation.