The Ohio Casino Control Commission is preparing to get sued over its attempt to shut down trading of sports event contracts in the Buckeye State.
Members of the Ohio sports betting regulator were warned Wednesday to brace for a lawsuit in connection with the cease-and-desist letters the commission sent on March 31 to three federally regulated prediction markets.
The Ohio Casino Control Commission (OCCC) issued those notices to Kalshi, Robinhood, and Crypto.com after determining their sports event contracts met the definition of sports gaming under local law and required a license to be legally offered in the state.
And now Kalshi has been hit with a cease-and-desist letter by Ohio regulators in connection with sports event contracts. The Ohio Casino Control Commission sent C&Ds to Robinhood and Crypto dot com as well, per a press release. pic.twitter.com/VuEPPux4aR
— Geoff Zochodne (@GeoffZochodne) March 31, 2025
Prediction market users can buy and sell those event contracts, making de facto wagers on NBA and MLB games, among other things. Ohio gave the three companies until Monday to notify the OCCC that they had complied with its request to knock it off.
Andromeda Morrison, the general counsel and deputy executive director of the commission, told Covers in an email on Wednesday that the regulator has spoken with the three companies that were issued cease-and-desist notices on March 31.
Morrison added that the prediction markets were "provided additional time for them to engage with the Commission concerning the situation."
But they do read the news in Ohio, and the Casino Control Commission is well aware of what’s happened to their peers in other states when they’ve asked federally regulated prediction markets to stop offering contracts tied to sporting events.
Officials in Nevada, New Jersey, Illinois, Maryland, and Montana have issued similar cease-and-desist notices to prediction markets.
One of the prediction market operators, Kalshi, has fired back with federal lawsuits in Nevada and New Jersey. The OCCC heard from staff on Wednesday that it’s “very likely” the Ohio sports betting regulator will face similar legal pushback in the not-too-distant future.
OCCC chair Thomas Stickrath moved that the regulator go into a closed-door, executive session “to confer with counsel regarding imminent court action” involving the cease-and-desist notice sent to Kalshi.
The commission then did so near the conclusion of its meeting on Wednesday, so it could receive advice from the state’s attorney general’s office and the regulator’s legal team.
Sue me
It may be a prudent move by Ohio sports betting regulators given that cease-and-desist letters to prediction markets have prompted legal action in other states.
Those prediction markets rose to prominence in and around last year’s presidential election, as they offered a legal avenue for wagering on the race for the White House. The market operators and their sports event contracts are also available in all 50 states, not just those with legalized sports betting.
Yet the launch of sports event contracts late last year has now prompted an attempted crackdown by some state-level gaming regulators that oversee sportsbook operators such as DraftKings and FanDuel.
Sports event contracts look and function a lot like state-regulated sports betting, the regulators contend. As a result, the contracts are both a challenge to state sports betting rules and competition for the companies abiding by those regulations.
“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,” OCCC executive director Matthew Schuler said in a press release last month. “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."
A spokesperson for Kalshi declined to comment on Wednesday. However, the company has had success in Nevada with its lawsuit there, winning a preliminary injunction against local gaming regulators.
"To the extent the States or other interested parties object to Kalshi offering sports and election event contracts, they must take that up with the [Commodity Futures Trading Commission] and Congress," a federal judge in Nevada wrote earlier this month. "Such policy issues are beyond the jurisdiction of this court."
