The Ohio Casino Control Commission (OCCC) has ordered 10 prediction market operators and brokers to stop offering sports event contracts in the state, citing a federal appeals court ruling that said federal commodities law does not preempt Ohio’s sports-gaming laws.
The cease-and-desist notices were issued to Underdog, Gemini Titan, Coinbase, ProphetX, Novig, Robinhood Derivatives, Polymarket’s U.S. entity, Plus500US Financial Services, Moomoo Financial and Webull Financial. The companies must stop offering the contracts and confirm compliance with the commission by Oct. 16.
The commission said the contracts constitute sports gaming and require an Ohio license, which none of the 10 recipients holds.
“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,” OCCC Interim Executive Director Andromeda Morrison said.
The notices bar the companies from soliciting or accepting orders for sports event contracts from Ohio residents or operating a designated contract market or futures commission merchant offering such contracts to people in the state.
The OCCC based its action on the Sept. 25 ruling by the Sixth U.S. Circuit Court of Appeals in KalshiEx LLC v. Schuler. The court affirmed Ohio’s denial of Kalshi’s request for a preliminary injunction and found that the Commodity Exchange Act does not preempt Ohio’s gambling laws.
“Accordingly, we hold that the CEA does not expressly preempt the states’ sports-betting laws because those laws do not directly regulate DCMs but have only incidental effects on them,” Circuit Judge Julia Smith Gibbons wrote.
“The Sixth Circuit’s ruling makes clear that sports event contracts are subject to Ohio’s gambling laws. The Commission expects these entities to cease their illegal gambling activity in Ohio immediately,” Morrison said.
Kalshi was not among the 10 companies receiving notices, most likely due to Ohio’s ongoing litigation against the operator. Robinhood had previously argued that the contracts were swaps and that federal law preempted Ohio’s rules.
The Ohio action comes amid differing federal court rulings on prediction-market sports contracts. A federal judge in Illinois recently found that Kalshi’s contracts were likely swaps and that parts of the state’s gambling laws were likely preempted.
The OCCC said failure to comply could lead to administrative, civil, nuisance, or criminal actions.