CFTC backs Kalshi in Ohio fight over prediction markets jurisdictional battle

The Commodity Futures Trading Commission is weighing in on another legal battle over states’ authority to regulate prediction markets —  this time in Ohio.

In an amicus brief filed Tuesday in the U.S. Court of Appeals for the Sixth Circuit, the CFTC challenged Ohio's 2025 complaint filed against Kalshi, arguing that the state is overstepping federal jurisdiction. In the complaint, Ohio federal officials, including Ohio Casino Control Commission Executive Director Matthew Schuler, said the predictions market was operating as unlicensed sports betting. In March, Chief Judge Sarah D. Morrison of the U.S. District Court for the Southern District of Ohio denied Kalshi's request for a preliminary injunction.

In that ruling, Judge Morrison threw cold water on the idea that Congress had intended to "preempt state sports gambling laws."

However, CFTC Chair Michael Seling says the judge's view is wrong.

"The federal district court in Ohio took an improperly narrow view of the Commission’s jurisdiction, and we are asking the Court of Appeals to correct that error," Selig said in a statement on Tuesday. "As I’ve said repeatedly, the CFTC will not allow overzealous state governments to undermine the agency’s longstanding authority over these markets."

Over the past few months, the CFTC has sued five states, including Wisconsin, Illinois, Arizona, Connecticut, and New York, in its fight to assert its oversight over prediction markets. Those platforms have surged in popularity in recent years, particularly after the 2024 U.S. presidential election cycle.

Selig has further looked to assert jurisdiction by proposing rules for prediction markets. He has argued that the CFTC has a broad statute, despite objections from states that say platforms are violating local gaming and gambling laws, particularly related to sports-related bets.

States have pushed back. Last month, New York Attorney General Letitia James and 37 other attorneys general filed an amicus brief supporting Massachusetts' lawsuit against Kalshi over gambling laws. In a statement, James said that prediction markets "cannot ignore states' gambling laws that are designed to protect consumers."

Earlier Tuesday at the Financial Industry Regulatory Authority's annual conference, Selig said states are trying to cancel out federal law.

"We have a federal framework for our markets, and that's there for a reason, because these markets cross state lines," Selig said. "You've got people trading across the country and you need a federal regulator for that."