A federal judge in Ohio ruled Tuesday that prediction market platform Kalshi must adhere to state regulations on gambling. 

In denying Kalshi’s request for a preliminary injunction against state regulators, U.S. District Judge Sarah D. Morrison wrote that the Commodity Exchange Act does not preempt Ohio’s sports gambling laws, which the company had argued in filing suit in October against officials at the Ohio Casino Control Commission and state Attorney General Dave Yost (R).

“History reveals no evidence that Congress intended to preempt state sports gambling laws,” wrote Morrison, whom President Trump appointed during his first term, in her 21-page opinion. 

Kalshi, which along with Polymarket allows users to wager on a variety of events across industries, had also argued its contracts should be treated as “swaps” akin to those found in financial markets. 

However, Morrison wrote that such a designation is “absurd,” as swaps are “understood as a transaction involving financial instruments and measures that traditionally and directly affect commodity prices.”

“Currency exchange rates, the weather, and energy costs all do that; the number of points scored in the Huskies-Bobcats game does not,” she noted. 

Yost, the Ohio attorney general, celebrated the ruling on Monday.

“Kalshi argued the federal Commodity Exchange Act preempts enforcement of Ohio law. Nope,” he wrote on the social platform X. “These ‘prediction markets’ have exploded and look an awful a lot like gambling. Big win for Ohio!”

A Kalshi spokesperson told NBC News the company disagrees with Morrison’s ruling and will “promptly seek an appeal.”

Last month, Commodity Futures Trading Commission (CFTC) Chair Michael Selig said he would challenge state attempts to regulate prediction markets, which he argued infringes on the CFTC’s “exclusive jurisdiction” over the platforms.

“They provide useful functions for society by allowing everyday Americans to hedge commercial risks, like increases in temperature and energy price spikes,” Selig said at the time. “They also serve as an important check on our news media and our information streams.”