Ohio Joins Growing List Of States To Issue Cease-And-Desists To Prediction Market Operators

Nothing attracts a crowd like a crowd. Fast on the heels of Nevada and New Jersey sending cease-and-desist letters to prediction market operators offering contracts on sports events and Massachusetts openly questioning their legality, Ohio piled on Monday.

As explained in a press release obtained Monday afternoon by Casino Reports, the Ohio Casino Control Commission (OCCC) issued cease-and-desist notices to three sites allowing users to risk money on sports outcomes: Kalshi, Robinhood, and Crypto.com.

In his statement within the press release, OCCC Executive Director Matthew Schuler was explicit in his interpretation of what the trio of companies are doing.

“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,” said Schuler. “The only difference is that these event contracts do not have the consumer protections required under Ohio law and are accessible to Ohioans under 21 years of age. The Commission must take action to fulfill its statutory responsibilities and ensure the integrity of sports gaming in Ohio.” 

‘The definition of sports gaming’

As the release spelled out, “The Commission determined the event contracts offered by the companies on sporting events meet the definition of sports gaming under the law, which requires licensure to be legally offered in Ohio.”

So Kalshi, Robinhood, and Crypto.com were issued letters that spelled out they could not offer sports event contracts to Ohioans and must notify the commission of their compliance with this demand within two weeks — by April 14.

The three operators are regulated not state-by-state like sportsbook operators are, but rather federally by the Commodity Futures Trading Commission (CFTC). Ohio, like Nevada, New Jersey, and Massachusetts, seemed content to remain hands-off until this year, when the operators began offering a form of wagering on sports events such as the Super Bowl and March Madness.

On Friday, Kalshi swung back at Nevada and New Jersey’s regulators, suing for declaratory and injunctive relief.

In a statement posted to LinkedIn over the weekend, Kalshi CEO Tarek Mansour wrote, in part, “While they are not our regulators, both states have issued cease and desist orders that fundamentally misunderstand prediction markets and undermine the foundation of U.S. financial markets, which are regulated by the federal government. We have made every effort to engage proactively with both Nevada and New Jersey and try to educate them about prediction markets, how they are regulated, and how critical they are… but our words fell on deaf ears.”

Mansour insisted that “Kalshi will keep fighting for the right of prediction markets to thrive.”

That may mean Ohio will be the next state Kalshi files suit against.

Then again, there may come a point when the operators decide their prediction markets can “thrive” without specifically including sports contracts.