Polymarket has challenged Ohio’s sports betting regulations in federal court, arguing that the state’s licensing requirements discriminate against interstate commerce and conflict with the Commodity Exchange Act (CEA).
The lawsuit follows a Sept. 25 federal appeals court ruling against rival prediction market Kalshi. The Sixth Circuit unanimously determined that Kalshi’s sports event contracts were not swaps under the CEA and that federal law would not override Ohio and Tennessee’s gambling regulations even if they qualified as swaps.
Polymarket argues that the decision preceded subsequent Commodity Futures Trading Commission (CFTC) action and remains subject to further judicial review. It cites an Oct. 9 interim final rule and proposal addressing sports, political, cultural, and weather-related event contracts. The rule, effective Oct. 19, excludes state-licensed sportsbook wagers and casino games from the swap definition, with comments due Nov. 18.
QCX LLC, operating as Polymarket US, filed the complaint Oct. 16 in Ohio’s Southern District federal court against Attorney General Andy Wilson, Ohio Casino Control Commission (OCCC) Interim Executive Director Andromeda Morrison and seven commissioners. The case, No. 2:26-cv-01502, is assigned to Judge Douglas R. Cole.
The filing coincided with a deadline imposed through cease-and-desist letters issued Oct. 2 to Polymarket and nine other prediction market operators and brokers. Ohio regulators classified sports event contracts as sports gaming and ordered recipients to stop offering them without state licenses, warning of administrative, civil, and criminal penalties.
Most recipients reportedly continued operating after the deadline, although Plus500US agreed to discontinue its sports contracts. Polymarket and Robinhood emphasized federal oversight of their businesses.
Polymarket maintains that Ohio’s licensing framework favors local businesses. Type A licenses require an in-state business presence or facility, with regulators considering applicants’ local economic contributions. Licenses are generally capped at 25 proprietors, while national brands operate through agreements with licensed businesses.
The complaint challenges requirements for Ohio-based wagering servers and restrictions limiting customers to those physically within the state. “These discriminatory, balkanizing measures violate the Constitution’s promise of open, interstate commerce,” the complaint states.
Polymarket, designated a contract market by the CFTC on July 9, 2025, argues that federal commodities oversight supersedes state regulation of its contracts. It also cites Ohio’s recognition of out-of-state licensing credentials and interstate liquidity arrangements as inconsistent with the state’s restrictions.
Polymarket is seeking preliminary and permanent injunctions, declarations that relevant Ohio gambling statutes and regulations are unconstitutional and preempted as applied to its operations, and attorneys’ fees and costs. Squire Patton Boggs and Gibson, Dunn & Crutcher represent the company.
Meanwhile, Ohio Gov. Mike DeWine said the state would pursue lawsuits against noncompliant operators, describing sports event contracts as “pure and simple gambling.”
“The law is very clear,” DeWine said. “The court decisions have been very clear. The attorney general of Ohio is taking actions he needs to take. These are not self-executing. You have to actually go out and file these suits, and that’s what we are going to do.”