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State of Play’s TL;DR
- The Sixth Circuit denied Kalshi’s request to pause Ohio enforcement, clearing the way for state regulators to pursue penalties including a recommended $5 million fine.
- This fast-tracked appeal keeps Kalshi’s federal pre-emption fight alive but gives Ohio officials room to move now.
The Sixth Circuit’s three-judge panel on April 24 refused Kalshi’s motion for a stay pending appeal, while ordering an expedited schedule for the company’s challenge to Ohio officials.
The panel said prediction market firm Kalshi’s lawsuit raised “serious questions on the merits” and acknowledged potential irreparable harm. But it concluded Kalshi hadn’t shown sufficient grounds for an injunction because the potential harm to Ohio outweighed Kalshi’s interests.
The order emphasized that pre-emption of state law must be clear, stating, “we therefore must begin with the presumption that Congress did not mean to pre-empt ‘Ohio’s historic police powers’ unless the Commodity Exchange Act discloses that as ‘the clear and manifest purpose of Congress.’”
With the stay denied, Ohio Attorney General David Yost and the Ohio Casino Control Commission – represented by Executive Director Matthew Schuler – can proceed with enforcement steps, including a previously recommended $5 million fine.
Issue could end up in US Supreme Court
For players, the immediate risk is practical: Ohio residents could see Kalshi markets restricted or accounts affected if state sanctions are imposed. Bettors should expect possible geofencing, service interruptions in Ohio, and heavier compliance checks.
Players outside Ohio aren’t automatically affected, but a legal victory for Ohio could encourage other states to pursue similar enforcement, increasing fragmentation in where prediction markets operate.
For operators, the ruling raises financial and operational stakes. Kalshi’s central defense – that its event contracts are swaps under the Commodity Exchannge Act and thus fall under CFTC jurisdiction – faces skeptical language from the Sixth Circuit.
That increases the risk of fines, enforcement actions, and additional compliance costs (geoblocking, legal defenses, licensing strategies).
Kalshi’s appeal will be fast-tracked to a merits panel; the company can still seek en banc review in the Sixth Circuit or ask the US Supreme Court to intervene, though timing makes those routes uncertain. The contrast with the Third Circuit – which granted Kalshi relief in a New Jersey case – raises the prospect of a circuit split that could prompt Supreme Court review.
Based on reporting by Derek Helling for DeFi Rate.
