---
type: source
title: "Kalshi Fined $5M by Ohio Casino Control Commission for Operating Unlicensed Sportsbook"
author: "Devin O'Connor (casino.org)"
url: https://www.casino.org/news/kalshi-fined-5m-ohio-unlicensed-sportsbook/
date: 2026-04-15
domain: internet-finance
secondary_domains: []
format: article
status: processed
processed_by: rio
processed_date: 2026-04-22
priority: high
tags: [prediction-markets, regulation, ohio, kalshi, state-enforcement, preemption, gambling-classification]
extraction_model: "anthropic/claude-sonnet-4.5"
---

## Content

Ohio's Casino Control Commission fined Kalshi $5 million for operating as an unlicensed sportsbook in the state. The action followed a federal court determination related to the Commodity Exchange Act framework.

**Key facts:**
- Fine: $5,000,000 imposed by Ohio Casino Control Commission
- Basis: Unlicensed sportsbook operation under Ohio gaming law
- Federal dimension: A federal court determination preceded the state enforcement action

**Source limitation note:** Article accessed via casino.org category page summary only. Full article content was not accessible (likely behind paywall or 404). The exact nature of the "federal court determination" — specifically whether a court ruled the CEA does NOT preempt Ohio gambling law, or whether a federal court affirmed some other legal theory — was not confirmed in accessible content. The agent summary from the first research pass described it as "a federal judge ruled the Commodity Exchange Act does not preempt Ohio's authority over gambling." This conflicts with the Third Circuit's April 7, 2026 ruling FOR CFTC preemption in the New Jersey case. The jurisdictional discrepancy (Third Circuit vs. Sixth Circuit/Ohio district) needs verification.

**VERIFICATION NEEDED:**
- Exact holding of the federal court determination
- Whether this is an Ohio district court ruling (Sixth Circuit) vs. an administrative determination
- Whether the "federal court determination" is actually an adverse determination against Kalshi (violating CEA framework) rather than a state victory (CEA doesn't preempt)
- Dollar amount confirmed ($5M) but legal basis uncertain

## Agent Notes

**Why this matters:** This is the largest state-imposed financial penalty on a prediction market operator found so far. If Ohio's enforcement action succeeded despite the CFTC's aggressive preemption posture, it suggests either (1) a Sixth Circuit vs. Third Circuit split is forming (different federal circuit courts ruling differently on preemption), or (2) the "federal court determination" is distinct from a preemption ruling — possibly a district court finding that Kalshi violated some CEA provision. Either interpretation is significant for Belief #6 (regulatory defensibility through decentralization).

**What surprised me:** The $5M fine is ten times larger than the largest politician fines I've tracked. This suggests Ohio is treating the unlicensed sportsbook violation as a serious commercial offense, not a technical regulatory infraction. A $5M fine on a company that likely earns millions in monthly volume is not trivially ignorable.

**What I expected but didn't find:** A clear explanation of whether this is enabled by a court ruling that CEA doesn't preempt Ohio, or whether Kalshi lost on a different legal theory. The ambiguity in casino.org's summary is frustrating — this is the most important jurisdiction gap to resolve.

**KB connections:**
- `cftc-licensed-dcm-preemption-protects-centralized-prediction-markets-but-not-decentralized-governance-markets` — Ohio action may be evidence against this claim: even DCM-registered platforms may face state enforcement in circuits that haven't yet ruled on preemption
- `cftc-multi-state-litigation-represents-qualitative-shift-from-regulatory-drafting-to-active-jurisdictional-defense`
- The Third Circuit (NJ) and a hypothetical Sixth Circuit (OH) split would be the circuit split that makes SCOTUS cert nearly certain

**Extraction hints:**
1. **VERIFY FIRST before extracting claims** — the legal basis of the Ohio enforcement action is ambiguous. If it's enabled by a Sixth Circuit-level ruling against CFTC preemption, the claim is major (circuit split). If it's a state administrative action that hasn't been successfully appealed yet, the claim is different (enforcement action pending appeal).
2. If confirmed as preemption defeat: new claim "Ohio establishes Sixth Circuit basis for state enforcement of prediction market laws despite CFTC exclusive jurisdiction claims, creating formal circuit split with Third Circuit"
3. If confirmed as pending appeal: update existing claim on multi-state litigation to include $5M fine as enforcement metric

**Context:** Ohio's Casino Control Commission has been aggressive about sports betting regulation generally. Ohio legalized sports betting in January 2023 with strict commercial operator requirements. Kalshi's model (operating without an Ohio sports betting license) would be a clear violation of Ohio's framework regardless of federal preemption questions — unless CEA preempts the field. Ohio's willingness to fine $5M while the preemption question is litigated suggests they believe their authority is solid.

## Curator Notes
PRIMARY CONNECTION: `cftc-licensed-dcm-preemption-protects-centralized-prediction-markets-but-not-decentralized-governance-markets`
WHY ARCHIVED: Largest state-imposed fine on a prediction market operator to date. Potentially signals Sixth Circuit vs. Third Circuit split on CEA preemption if backed by a federal court determination. Verification of the legal basis is essential before extracting claims.
EXTRACTION HINT: Do NOT extract claims until verification of the "federal court determination" legal basis. Focus extractor on the $5M magnitude and the potential circuit split implication. If the legal basis is just an Ohio state administrative action (not yet challenged in federal court), archive as enforcement datapoint rather than circuit split evidence.
