Ohio Cracks Down on Kalshi: Prediction Markets Labeled Illegal Gambling

In Ohio, a major legal battle is brewing between state officials and modern trading platforms. Governor Mike DeWine clarified on October 2, 2026, that prediction markets allowing trades on sporting events are considered illegal gambling under state law. This statement follows a pivotal ruling by the U.S. Sixth Circuit Court of Appeals, which upheld Ohio’s authority to regulate sports offerings on such markets, even if they present themselves as financial exchanges.

DeWine, a longtime opponent of gambling expansion, expressed satisfaction with the judicial victory. He emphasized that companies like Kalshi are attempting to evade state oversight through linguistic maneuvering. For the governor, the situation is clear: anyone offering wagers on the outcome of soccer matches or other sports events must play by the same rules as established bookmakers. The attempt to redefine these activities as financial transactions is seen merely as a way to avoid taxes and strict regulatory controls.

Numbers and facts

The dispute already has a costly history. In April, the Ohio Casino Control Commission fined Kalshi $5 million for operating unlicensed sports gaming. The company had begun adding sports to its contract offerings in 2025, which previously focused on weather forecasts or political events. The regulatory body ordered Kalshi to either stop its operations or go through the standard licensing process. This process not only involves costs of up to $1 million but also requires providers to pay a 20% tax on sports betting revenue.

A spokesperson for Kalshi, however, argues that their contracts are swaps overseen by the U.S. Commodity Futures Trading Commission (CFTC). The company even marketed itself as the first nationwide legal sports betting platform available in all 50 states. The court in Ohio disagreed, granting the state the right to enforce its own laws. DeWine used blunt language to describe this tactic:

„Just because they call themselves something doesn't mean they're not gambling. If it's a pig, it's a pig. If we call that pig a sheep, it's still not a sheep. It's a pig. These guys are pigs. They are gambling and they don't want to pay anything. They just want to have a free ride. So we will certainly enforce the law.“ - Mike DeWine, Governor of Ohio

Background

The core of the conflict lies in the definition of the products offered. While Kalshi refers to them as event contracts that users can buy and sell, the Casino Control Commission views them as traditional bets. A major concern is that Kalshi currently fails to meet the strict requirements imposed on regulated operators like DraftKings or FanDuel. This includes rigorous age verification to ensure users are at least 21 years old. Kalshi stated in court documents that complying with these state regulations could threaten the company’s viability.

Local sports organizations are also monitoring the development closely. Mary Shepro, president of business operations for Columbus Crew, noted that integrity is the most important foundation for sports. Without clear rules and fair monitoring, the game loses its meaning. While prediction markets have become part of the ecosystem, she believes they must be subject to the same fairness standards as all other market participants.

Why it matters for German players

For German players, the situation in Ohio serves as a prime example of why strong national regulation like the Interstate Treaty on Gambling 2021 (GlüStV 2021) is beneficial. In Germany, the Joint Gambling Authority of the States (GGL) ensures that only providers with a German license can operate in the market. Platforms attempting to offer sports betting under the guise of financial products or prediction markets stand little chance of legal approval if they bypass player protection requirements.

Players in Germany benefit from the GGL whitelist, which provides certainty about who is operating legally. Protective measures include a cross-operator deposit limit of 1,000 euros per month and a stake limit of 1 euro per spin for virtual slot machines. Additionally, all legal providers are connected to the LUGAS IT system to minimize multiple registrations and the risk of addiction. Betting on unlicensed sites not only risks legal trouble but also leaves players without legal recourse in case of a dispute. The Kalshi case demonstrates that global regulators are increasingly cracking down on gray-market providers to protect market integrity.

What it means for GGL-licensed casinos

German casinos with a GGL license do not need to fear this competition as long as the authority consistently acts against illegal offshore offers or gray-market platforms. The transparency and tax obligations DeWine is demanding in Ohio are already standard in Germany. For licensed operators, this means legal certainty, even if strict limits are often perceived as a competitive disadvantage compared to MGA or Curacao providers. However, the trend shows that judiciaries worldwide are losing patience with providers pretending to be something they are not. In the long run, the Ohio ruling strengthens the position of state-regulated markets against unregulated competition.