Ohio is ready to go after more operators of prediction markets that offer contracts related to sports, Governor Mike DeWine said, claiming the products break the state’s gambling laws. The Ohio Casino Control Commission has already issued cease-and-desist notices to several companies, including Kalshi, Polymarket and Robinhood.
DeWine Challenges Prediction Markets Over Ohio Betting Restrictions
DeWine said the state will go after enforcement, not solely warnings. He has asked why prediction market operators should be permitted to offer sports-related bets without being subject to the same requirements placed on licensed sportsbooks.
Ohio has banned some types of sports betting since 2005, such as bets on specific plays within a game. State officials say such restrictions can be applied to agreements concerning some sporting events no matter how the platforms describe their goods.
The governor has also raised issues about the advertising of prediction markets, which he has seen on sporting events. He says the platforms are trying to evade state supervision by operating under a different regulatory scheme, as reported by The Statehouse News Bureau.
The question is whether federal regulation allows prediction markets to evade state gambling laws. Kalshi says its event contracts are regulated by the Commodity Futures Trading Commission (CFTC) and not by state gaming regulators.
A federal court recently ruled Kalshi must comply with Ohio law. The company challenged the decision, arguing that federal oversight should prevail. The legal fight could decide how far states can go to limit sports-related contracts offered by federally regulated platforms.
Prediction Markets Fuel Regulatory Disputes and Consumer Protection Concerns in Ohio
Two bills introduced in the Ohio Legislature could toughen the state’s approach. Senate Bill 479 would ban betting on elections and ban prediction market websites from offering contracts on elections. Senate Bill 430 would treat sporting event contracts as sports gambling, bringing them under state regulation and taxation. So far, neither proposal has gained much traction in the legislature.
The developments are the latest since DeWine on October 5 warned that Ohio would invoke its gambling laws against Kalshi. The dispute is part of a broader battle between state regulators and prediction market operators over who has jurisdiction to regulate these products.
The regulatory debate has also attracted the attention of gambling harm prevention experts. In September, Derek Longmeier with the Problem Gambling Network of Ohio warned prediction markets could expose younger adults to gambling because users can start using them at age 18.
The legal age for traditional sports betting in Ohio is 21. Longmeier said the age group of 18 to 25-year-olds is especially vulnerable because of how easy it is to make trades online, and they are also more likely to try to make up for money lost in the past.
The controversy has also strained relations between gambling regulators and responsible gambling organizations. The Ohio Casino Control Commission’s decision to part ways with the National Council on Problem Gambling (NCPG) last September over its acceptance of a donation from Kalshi brought to light concerns that public confidence could be compromised by financial ties.
The NCPG has stated that accepting funding does not mean endorsing a company’s products. However, Ohio’s objections illustrate how prediction markets have become a thorny issue for both gambling regulation and consumer protection.