Ohio to finally enforce law against Kalshi sports market

[Mrbluntzy]

Remember that Kalshi sued Ohio and its state officials during October last year because Ohio's Casino Control Commission/regulators said that they are operating an unlicensed sports book and have to stop it or obtain a licence and have to also pay sports betting tax to Ohio before they can be allowed but as we already know, Kalshi refused because they believed that as they are regulated by the federal government that their contract is beyond state gambling laws.

According to the news I saw, the U.S. Sixth Circuit Court of Appeals has upheld Ohio’s authority to apply its sports betting rules to Kalshi’s sports event contracts. Finally, Mike DeWine got what he wants as he has always been against it. Gradually, the idea that prediction market is not related to gambling will worn out, so I think.

The Sixth Circuit last week affirmed a Southern District of Ohio decision denying Kalshi a preliminary injunction, holding the company had not shown its sports contracts qualify as “swaps” under exclusive Commodity Futures Trading Commission jurisdiction and that, even if they did, federal law would not preempt Ohio’s gambling statutes. Parallel relief Kalshi won in Tennessee was vacated.

DeWine went further in blunt terms, saying the operators “don’t want to pay anything” and “just want to have a free ride,” and vowed that Ohio “will certainly enforce the law.” The commission previously pursued a proposed multimillion-dollar civil penalty against Kalshi for unlicensed sports gaming; the broader dispute continues in court.

[Oshosondy]

There is a thread that we are discussing about prediction market legality as gambling. It will be good if you post this kind of thread there next time.

Prediction markets legality as gambling or derivative trading platforms, & rules

Gradually, the idea that prediction market is not related to gambling will worn out, so I think.

There is still ongoing battle between many states in United States and prediction markets. I do not think the idea of prediction market not as gambling is not something that will easily fade away in the United States.

[DPHOR]

There is a thread that we are discussing about prediction market legality as gambling. It will be good if you post this kind of thread there next time.

Prediction markets legality as gambling or derivative trading platforms, & rules

Gradually, the idea that prediction market is not related to gambling will worn out, so I think.

There is still ongoing battle between many states in United States and prediction markets. I do not think the idea of prediction market not as gambling is not something that will easily fade away in the United States.

To me I think this topic can still be locked and op could post it over there to avoid more repetitive comments over here.
From the look of things I have seen the mods over here working hard to keep this board clean by Locking some of the topics.
Kalshi and polymarket is actually trying to run away from regulation issues.

[Odohu]

Remember that Kalshi sued Ohio and its state officials during October last year because Ohio's Casino Control Commission/regulators said that they are operating an unlicensed sports book and have to stop it or obtain a licence and have to also pay sports betting tax to Ohio before they can be allowed but as we already know, Kalshi refused because they believed that as they are regulated by the federal government that their contract is beyond state gambling laws.

According to the news I saw, the U.S. Sixth Circuit Court of Appeals has upheld Ohio’s authority to apply its sports betting rules to Kalshi’s sports event contracts. Finally, Mike DeWine got what he wants as he has always been against it. Gradually, the idea that prediction market is not related to gambling will worn out, so I think.

Prediction market will keep trying to distance themselves from gambling even though everything they do is gambling, but they will continue to fail to convince everyone that what they are offering is not gambling. If this judgement stands, they will be forced to either come out boldly to obtain sportsbook license of stop offering sports bet in Ohio, this I call setting the record straight.

[o48o]

-cut-
Gradually, the idea that prediction market is not related to gambling will worn out, so I think.
-cut-

Obviously, but this loophole is about how much money they can make during the transition era, when they aren't bound by same laws. Meanwhile they will milk it in everywhere they can, and they are making enough to fight it in courts as well. I don't think that laws yet technically even exist to prevent insiders manipulating prediction market results and betting on them. At least not in same level as in casino regulations.

It's still a golden (unregulated) era for them. Reminds me of devs who got rich with altcoinscene in 2013-14, when there was no rules or sanctions. Even though this is happening in spectacularly different scale.

[Alphakilo]

Remember that Kalshi sued Ohio and its state officials during October last year because Ohio's Casino Control Commission/regulators said that they are operating an unlicensed sports book and have to stop it or obtain a licence and have to also pay sports betting tax to Ohio before they can be allowed but as we already know, Kalshi refused because they believed that as they are regulated by the federal government that their contract is beyond state gambling laws.

According to the news I saw, the U.S. Sixth Circuit Court of Appeals has upheld Ohio’s authority to apply its sports betting rules to Kalshi’s sports event contracts. Finally, Mike DeWine got what he wants as he has always been against it. Gradually, the idea that prediction market is not related to gambling will worn out, so I think.

Prediction market will keep trying to distance themselves from gambling even though everything they do is gambling, but they will continue to fail to convince everyone that what they are offering is not gambling. If this judgement stands, they will be forced to either come out boldly to obtain sportsbook license of stop offering sports bet in Ohio, this I call setting the record straight.

If the predictions market continues to maintain their stand that they aren't gambling or are distinct from gambling, then they should opt to obtain specific licenses that concludes this argument, because this isn't the end of such cases and we even see these markets bring integrated into trading and gambling platforms, so that creates a different mystery altogether.

[PX-Z]

This is a big setback for Kalshi. Just because its contracts are federally regulated it doesn't mean they should be exempt from state gambling laws. If a product works like sports betting, it's reasonable for regulators to require the same licensing, tax,.etc, etc.
However, this ruling is quite a meh, because not all prediction markets are necessarily gambling. Businesses on the same market should take a look on this as well for future prevention of whatever they might encounter.

[BIT-BENDER]

This is a big setback for Kalshi. Just because its contracts are federally regulated doesn't automatically mean they should be exempt from state gambling laws. If a product functions like sports betting, it's reasonable for regulators to require the same licensing, taxes, and consumer protections.
However, this ruling is quite a meh, because not all prediction markets are necessarily gambling. Businesses on the same market should take a look on this as well for future prevention of whatever they might encounter.

It's time to generally start accepting prediction market as gambling, the Kalshi case is what I haven't checked out thoroughly but I know the prediction market has had this dilemma of if it's actually under gambling or not.
Regardless the future is building regulations that guides the prediction market on its own even though there are similarities, but will Ohio be an example for other states.

[Hispo]

Remember that Kalshi sued Ohio and its state officials during October last year because Ohio's Casino Control Commission/regulators said that they are operating an unlicensed sports book and have to stop it or obtain a licence and have to also pay sports betting tax to Ohio before they can be allowed but as we already know, Kalshi refused because they believed that as they are regulated by the federal government that their contract is beyond state gambling laws.

According to the news I saw, the U.S. Sixth Circuit Court of Appeals has upheld Ohio’s authority to apply its sports betting rules to Kalshi’s sports event contracts. Finally, Mike DeWine got what he wants as he has always been against it. Gradually, the idea that prediction market is not related to gambling will worn out, so I think.

The Sixth Circuit last week affirmed a Southern District of Ohio decision denying Kalshi a preliminary injunction, holding the company had not shown its sports contracts qualify as “swaps” under exclusive Commodity Futures Trading Commission jurisdiction and that, even if they did, federal law would not preempt Ohio’s gambling statutes. Parallel relief Kalshi won in Tennessee was vacated.

DeWine went further in blunt terms, saying the operators “don’t want to pay anything” and “just want to have a free ride,” and vowed that Ohio “will certainly enforce the law.” The commission previously pursued a proposed multimillion-dollar civil penalty against Kalshi for unlicensed sports gaming; the broader dispute continues in court.

Well, this is a very important news when it comes to the gambling and betting law in Ohio against Kalshi. It seems that slowly the argument between better Kalshi and Polymarket are different from gambling sites like Stake or Rollbit are getting fuzzy. It seems that in the future we are going to continue to see lawsuits siding in favor of the states of the United States instead of siding in favor of Kalshi and Polymarket. This means that those services are going to be forced to comply with gambling laws in the United States and eventually they are going to lose their advantage against other casinos online.

It makes me wonder whether we are going to see some kind of new licensing for prediction markets in the future or they are going to have the same licenses the rest or the market already have.

[yahoo62278]

If you are betting the outcome of a sporting event, how could it not be considered sportsbetting? Kalshi made enough money from their platform, why wouldn't they just suck it up and get the license?

[Tungbulu]

The ruling could actually make it pretty difficult for the prediction markets to argue that sports contracts are totally different from gambling regulations. But that still doesn’t mean every prediction market is automatically gambling though, because this particular decision was specifically focused on Kalshi’s sports contracts and Ohio’s specific laws. Now the bigger question now should be whether other courts outside Ohio would also be willing to take the same position too.

[Darker45]

If you are betting the outcome of a sporting event, how could it not be considered sportsbetting? Kalshi made enough money from their platform, why wouldn't they just suck it up and get the license?

From their viewpoint, it's probably because you aren't betting. Strictly speaking, you're simply buying contracts. You aren't picking odds released by bookmakers; you're trading with fellow Kalshi traders.

But, yeah, this is ridiculous, and I agree with Ohio's strong determination to put Kalshi where it truly belongs.

I wonder, though, would the decision be any different had Kalshi offered their sports contracts in such a way that traders choose yes or no and not pick teams? There might be a technical difference between offering Washington vs. USC, for example, where users actually pick one or the other and "Will Washington win over USC?" where users just pick yes or no.

[Don Pedro Dinero]

If you are betting the outcome of a sporting event, how could it not be considered sportsbetting? Kalshi made enough money from their platform, why wouldn't they just suck it up and get the license?

Because they want more money.

From their viewpoint, it's probably because you aren't betting. Strictly speaking, you're simply buying contracts. You aren't picking odds released by bookmakers; you're trading with fellow Kalshi traders.

Not even they believe that themselves. That is the explanation they have given, based on a legal loophole, but they know that what they are accepting are bets. They know it, we know it, and the authorities in Ohio know it. It is only a matter of time before authorities around the world take steps in the same direction.

[Iranus]

Hmm, regulatory arbitrage Kalshi had been engaging in for so long has suffered major blow with this ruling from Sixth Circuit Court. For quite some time they had managed to shield themselve from state gaming commission and taxes by operating under CFTC's federal umbrella. However court has effectively stripped away almost all those advantage. Court is likely reasoning that if simply labeling sport betting as financial swap were enough to make it legal then there would have been no need for sportsbook to obtain state gaming license all this time.

[acroman08]

If you are betting the outcome of a sporting event, how could it not be considered sportsbetting? Kalshi made enough money from their platform, why wouldn't they just suck it up and get the license?

I'm guessing because it would ruin their defense from all the lawsuits they are facing coming from different US states. One of the lawsuits coming from New York, if I remember correctly, is asking for $36B for violating the state's gambling laws, though I doubt they are actually going to pay that $36B even if they lose the lawsuit.

Because they want more money.

True.

[5W-KILO]

The one thing about online casinos is you can run them yourself with few numbers of people or friends and get away with it for years because the law comes for you forcing you to do some verification and others.

It can never be the same with prediction markets, you can't run this off the radar like people can do the same with online casinos, the awareness is all over you already, once a new prediction market platform gets released it's all over the news.

[Swordsoffreedom]

However, this ruling is quite a meh, because not all prediction markets are necessarily gambling. Businesses on the same market should take a look on this as well for future prevention of whatever they might encounter.

Governor Mike DeWine’s words sound harsh, he used "so called" to mention prediction market. Actually their business model that operate around sport event while evading taxes and failing to pay licensing fee simply isn't sustainable in long run.

Now state from Tennessee to Ohio are banding together to crack down on Kalshi and seeking to halt its operation through legal action. It seems unlikely kalshi can survive much longer by relying on argument rooted in financial marke. A reckoning was inevitable sooner or later.

According to Governor Mike DeWine, they are losing out on revenue. This short video makes it clear that Governor has no intention of letting Kalshi off the hook easily.


https://www.youtube.com/shorts/zwv2kG4YGtw

[Dave1]

Everyone should not be surprised though, as both Kalshi and Polymarket are being hunted by different states because of it's market. We all know how some of this states are really strict on gambling. Although they could have allowed traditional base casinos, but here in prediction market which is online, they treat it differently.

Of course, it's business after all as there could be powerful individuals lobbying law enforcement or gambling authorities to go after this prediction market as they might have been losing a lot of money on them. That's why this is going to be a never ending battle for Kalshi and Polymarket and it will drag on for years until someone gives in.

[asriloni]

It's so good the more states are able to enforcing their gambling rules to the prediction market. Those prediction market must be aware to stop framing themselves as a non gambling site because in the end, they're still being considered as a gambling sites that needs to be regulated.

We had Utah who did it first, then Ohio is following it. So what's next, newyork? I can't wait to see more states to follow the same step like what Utah and Ohio did.

In the end of story, no matter how hard the prediction market framing themselves as a non gambling site, but they're still gambling site.

I can't wait how big the pressure those prediction market will be received when Trump is no longer as US president. If they are smart enough, they have to admit they're same as gambling platform.

[Somegory]

It's so good the more states is able to enforcing their gambling rules to the prediction market. Those prediction market must be aware to stop framing themselves as a non gambling site because in the end, they're still being considered as a gambling sites that needs to be regulated.

We had Utah who did it first, then Ohio is following it. So what's next, newyork? I can't wait to see more states to follow the same step like what Utah and Ohio did.

In the end of story, no matter how hard the prediction market framing themselves as a non gambling site, but they're still gambling site.

I can't wait how big the pressure those prediction market will be received when Trump is no longer as US president. If they are smart enough, they have to admit they're same as gambling platform.

Brilliant thinking, once Trump lose the office sit many things will face bigger challenges, the reason why many nonsense things are running and roaming freely is because of Trump in the office..

I hope these people are fully prepared already, if Trump never won the election I doubt that prediction markets will survive or will be allowed to run, they might all be crucified or put on very heavy law.

I think the only solution for now is imposing big law on prediction markets but one way or another I strongly believe that Trump family and people are benefiting from every single things that are allowed to run.