The Ohio Casino Control Commission (OCCC) has escalated its efforts against prediction markets, sending out 10 cease-and-desist letters last week to operators allegedly illegally offering sports event contracts within the state. These letters demand that all recipients halt their involvement with sports event contracts and provide written confirmation of their compliance by October 16. According to the OCCC, these offerings qualify as sports gaming under Ohio law and therefore require appropriate state licensing.
This move follows a recent ruling by the Sixth Circuit Court of Appeals, which ruled in favor of Ohio against Kalshi, dismissing the company's defense that its sports event contracts should be regulated by the Commodity Futures Trading Commission (CFTC) at the federal level.
The enforcement activity expands Ohio's crackdown on prediction markets beyond just Kalshi. Earlier this year, in March 2025, Kalshi received the state’s first cease-and-desist notice regarding sports contracts, but it is not among the ten new targets due to its ongoing legal proceedings with the commission.
The list of the ten prediction markets receiving cease-and-desist letters includes:
– Coinbase
– Gemini Titan
– Moomoo Financial
– Novig Betting
– Plus500US Financial Services
– Polymarket
– Prophet X
– Robinhood
– Underdog
– Webull Financial
OCCC Interim Executive Director Andromeda Morrison emphasized the need for compliance, stating, "Because these wagers lack the protections Ohio law requires, particularly for young and vulnerable people, the Commission must take action to fulfill its statutory responsibilities, protect consumers, and maintain fairness and integrity in sports gaming across Ohio." She added that the Sixth Circuit’s ruling clearly defines sports event contracts as being subject to Ohio’s gambling laws, urging these entities to stop their illegal activities immediately.
The OCCC's actions stem directly from the Sixth Circuit's unanimous decision, which stated that Kalshi’s sports event contracts do not qualify as swaps under the Commodity Exchange Act. Even if they did, the court found that federal commodities law does not obstruct the enforcement of Ohio and Tennessee's sports betting regulations.
Ohio regulators argue that these contracts effectively act as sports bets, as participants gamble on the outcomes of sports events for potential payouts. This classification subjects them to the same licensing, taxation, age verification, consumer protection, and integrity requirements that govern legal sportsbooks in the state.
While Ohio's ongoing litigation with Kalshi remains unresolved, the OCCC initiated its counteractions when it issued a cease-and-desist notice to Kalshi in March 2025, citing illegal offering of sports gaming contracts. The commission also cautioned licensed sportsbooks about potential integrity concerns linked to associations with companies viewed as illegal operators. Kalshi has contested Ohio's accusations, asserting that its contracts are federally regulated and not governed by state laws. In April, the OCCC proposed a $5 million penalty against Kalshi for these unlicensed activities, a matter now pending in state court.
Ohio Governor Mike DeWine expressed strong disapproval of prediction markets, stating they are merely a means of circumventing the law. He reiterated the standpoint that these markets should be treated equally to licensed sportsbooks, adhering to the same regulations, including Ohio's 20% tax and age restrictions.
As the national legal landscape becomes increasingly complex for Kalshi, the Sixth Circuit's decision aligns with previous rulings from the Ninth Circuit, which determined that Kalshi’s sports contracts likely do not fall under federal commodities law, permitting Nevada to enforce its gaming regulations. This contrasts with an April ruling by the Third Circuit, which found in favor of Kalshi, claiming a likelihood that its contracts are swaps and thus federally regulated. New Jersey has called on the U.S. Supreme Court to clarify these conflicting circuit decisions, and companies like Crypto.com and Robinhood have also requested that the issue be reviewed, potentially leading to a decisive ruling on the jurisdiction over prediction markets. With the Fourth Circuit yet to make a decision on the Maryland case involving Kalshi, all eyes are on the Supreme Court as it becomes the likely venue for a conclusive national resolution.
