Kalshi suffers court loss in Ohio over sports betting lawsuit
By Anonymous
The prediction markets platform argued for an injunction against Ohio authorities, claiming that federal commodities laws superseded state laws on sport event contracts.
An Ohio federal court has denied a motion filed by prediction markets platform Kalshi for a preliminary injunction against Ohio state authorities over allegations that the company was operating in violation of gambling laws.
In an order filed Monday, US District Court for the Southern District of Ohio Chief Judge Sarah Morrison denied Kalshi’s request for an injunction that would have blocked the Ohio Casino Control Commission and state attorney general from regulating contracts on the platform, specifically for sports betting.
According to the judge, Kalshi had failed to show that the sports event contracts available on the platform were subject to the “exclusive jurisdiction” of the Commodity Futures Trading Commission (CFTC).
“Even if this Court were to find that sports-event contracts are swaps subject to the CFTC’s exclusive jurisdiction, Kalshi has not shown that the [Commodity Exchange Act, or CEA] would necessarily preempt Ohio’s sports gambling laws,” said the opinion and order, adding:
The denial pushed back against the narrative from CFTC Chair Michael Selig, who said in February that the federal regulator had “exclusive jurisdiction” over prediction markets and threatened lawsuits against any authority claiming otherwise. Kalshi and prediction platforms face lawsuits in other US states over similar allegations involving unlicensed sports betting.
“This Court does not endeavor to explain why the CFTC has not exercised its authority [...] with respect to the sports-event contracts,” said the Monday filing in Ohio. “But the agency’s inaction is not proof that the sports-event contracts are regulated by or permissible under the CEA—and the Court has concluded they are not.”
Related: CFTC chair backs blockchain-based prediction markets as ‘truth machines’
In a statement to Cointelegraph, a Kalshi spokesperson said that the company “respectfully disagree[d] with the Court’s decision, which splits from a decision from a federal court in Tennessee just a few weeks ago, and will promptly seek an appeal."
Last week, Selig said that the federal regulator was working to provide guidance regarding prediction markets “in the very near future.” The CFTC chair is the sole Senate-confirmed commissioner in a panel normally consisting of five people.
Magazine: The debate over Bitcoin’s four-year cycle is over: Benjamin Cowen
Source: CoinTelegraph
