Ohio has joined the ranks of states responding to prediction market operators with cease-and-desist notices. Following similar actions from Nevada and New Jersey, which recently sent cease-and-desist letters to companies offering contracts on sports outcomes, Ohio added its voice on Monday, March 31.
The Ohio Casino Control Commission (OCCC) responded by issuing cease-and-desist letters to three operators: Kalshi, Robinhood, and Crypto.com. In a statement released by the OCCC, executive director Matthew Schuler clarified the commission's stance.
“Purchasing a contract based on which team a person thinks will win a sporting event is no different than placing a bet through a traditional sportsbook,” he stated. Schuler noted that the key difference lies in the absence of consumer protections required by Ohio law and the accessibility of these contracts to individuals under the age of 21. He emphasized the commission's obligation to ensure the integrity of sports gaming within the state.
The OCCC asserted that the event contracts offered by these companies qualify as sports gaming under Ohio law, which necessitates a license for legal operation. As a result, Kalshi, Robinhood, and Crypto.com have been directed to cease offering sports event contracts to Ohio residents. They must inform the commission of their compliance by April 14.
Unlike traditional sportsbook operators, these three companies are regulated at the federal level by the Commodity Futures Trading Commission. Until this year, states like Ohio, Nevada, New Jersey, and Massachusetts had largely taken a hands-off approach, but that changed when the operators began providing wagering on major sporting events, including the Super Bowl and March Madness.
On a related note, Kalshi has challenged the actions taken by regulators in Nevada and New Jersey by filing a lawsuit seeking declaratory and injunctive relief.
