Ohio prepares lawsuits against prediction markets that ignore sports-contract orders

Ohio was preparing to sue prediction-market operators that did not obey orders to stop offering sports event contracts to residents, Gov. Mike DeWine said, escalating an enforcement campaign after an Oct. 16 compliance deadline passed.

“The law is very clear. The court decisions have been very clear,” DeWine said. “These are not self-executing. You have to actually go out and file these suits, and that’s what we are going to do.” Ohio Attorney General Andy Wilson was expected to begin filing cases against noncompliant operators.

As reported earlier this month, the Ohio Casino Control Commission ordered 10 operators and brokers to halt sports contracts for Ohio residents and confirm compliance by Oct. 16.

One operator has confirmed compliance, while two are pursuing litigation against the commission. Polymarket is one of the litigants, although the second company was not identified. The commission also declined to name the company that complied and said it remained in active discussions with several others about meeting Ohio requirements.

The notices covered Underdog, Gemini Titan, Coinbase, ProphetX, Novig, Robinhood Derivatives, Polymarket’s U.S. entity, Plus500US Financial Services, Moomoo Financial and Webull Financial. They barred the firms from soliciting or accepting orders for sports event contracts from Ohio residents, or from operating markets or brokerage businesses offering those contracts in the state.

Ohio maintains that the contracts constitute sports gaming requiring an Ohio licence, which none of the recipients held. The notices warned that continued activity could bring administrative, civil, nuisance or criminal action. They followed the Sixth Circuit’s Sept. 25 decision in KalshiEx LLC v. Schuler, which upheld Ohio’s denial of Kalshi’s request for a preliminary injunction and held that the Commodity Exchange Act did not expressly pre-empt the state’s sports-betting laws.

DeWine said he continued to see prediction-market advertising during ball games and described the offerings as “pure and simple gambling.” Statehouse News Bureau reported that Polymarket, Robinhood and Kalshi offer contracts tied to sports predictions, including individual athletes’ actions during games. Ohio has prohibited some forms of such sports-prediction betting since 2005.

Operators have argued instead that federal commodities regulation governs their products. Robinhood said its contracts are federally regulated by the Commodity Futures Trading Commission and offered through CFTC-registered Robinhood Derivatives LLC. Polymarket’s lawsuit argues that Ohio’s notice violates the Constitution’s Commerce Clause and is pre-empted by the Commodity Exchange Act.

The state’s approach carries consequences beyond a shutdown. If the products are treated as sports betting, operators would face Ohio’s 20% tax on sports-betting receipts, advertising rules, a voluntary-exclusion programme and a ban on customers younger than 21. Senate Bills 430 and 479, which would respectively classify sporting-event contracts as regulated sports gambling and prohibit election betting, had not gained traction in the Legislature.