Ohio Turns Its Kalshi Court Win Into a 10-Company Prediction Market Crackdown
Key Points
- Ohio has ordered 10 prediction market companies and brokers to stop offering or facilitating sports event contracts and confirm compliance by October 16.
- Ohio is pursuing companies at different points in the transaction chain, including exchanges that list sports contracts and financial platforms that provide customers with access to them.
- The enforcement follows a September 25 Sixth Circuit ruling rejecting Kalshi's argument that federal commodities law shields its sports contracts from Ohio gambling laws.
- The commission says noncompliance can trigger civil and other enforcement actions, including penalties tied to money or property obtained through the activity.
Ohio Expands Prediction Market Enforcement After Sixth Circuit Kalshi Ruling
The Ohio Casino Control Commission sent cease-and-desist letters dated October 2 to 10 companies it says are offering, participating in or facilitating unlicensed sports gaming in the state. The notices demand that sports event contract activity stop immediately and require written confirmation of compliance within 14 days, putting the reporting deadline on October 16.
The 10 affected companies are:
- Coinbase
- Gemini Titan
- Moomoo Financial
- Novig
- Plus500US
- Polymarket
- ProphetX
- Robinhood Derivatives
- Underdog Predict
- Webull Financial
The commission is applying the same basic legal theory across a much broader slice of the industry. Ohio law defines sports gaming as the business of accepting wagers on sporting events, and state law generally requires an Ohio sports gaming license to operate, conduct or assist in conducting it. The regulator's position is that calling the product an event contract does not take a sports outcome outside that framework.
The Orders Reach Beyond the Exchanges That List the Contracts
The breadth of the recipient list is one of the more consequential parts of the action. Ohio is pursuing companies involved at different points in the transaction chain, including businesses that provide customers with access to contracts listed on designated contract markets.
The letters specifically cover "soliciting or accepting orders for sports event contracts listed on DCMs from persons located in Ohio." They also target operating a designated contract market, or DCM, and acting as a futures commission merchant, or FCM, when those businesses make sports contracts available to Ohio customers.
That approach gives the commission more than one enforcement point. A state does not necessarily have to focus only on the exchange where a contract originates if a broker or financial platform is providing Ohio customers with the route into that market.
Robinhood's notice makes that strategy particularly clear. The commission is reasserting a March 2025 cease-and-desist order that it had held in abeyance while the Kalshi litigation moved through federal court. The new letter says Robinhood must stop offering or facilitating sports event contracts either as an FCM or through its involvement with a DCM.
The Sixth Circuit Gave Ohio a Much Stronger Enforcement Hand
The new orders arrived one week after the Sixth Circuit's September 25 decision in KalshiEX LLC v. Schuler, which dealt a significant defeat to Kalshi's federal preemption argument.
The three-judge panel held that Kalshi had not shown its sports event contracts qualify as swaps within the Commodity Futures Trading Commission's exclusive jurisdiction. The court went further and held that even if the contracts were swaps, the Commodity Exchange Act "neither expressly nor impliedly preempts Ohio's or Tennessee's gambling laws."
The ruling affirmed the denial of Kalshi's request for a preliminary injunction against Ohio and vacated an injunction that had protected Kalshi from enforcement in Tennessee. The underlying cases continue, but the published appellate ruling removes the federal shield Kalshi and similar companies have relied on in arguing that state gambling regulators lack authority over sports contracts within the Sixth Circuit.
Kalshi is absent from this new batch of notices because its Ohio dispute is already proceeding through separate litigation and enforcement channels. The commission also issued an April notice seeking a $5 million civil penalty or monetary fine against Kalshi for alleged unlicensed sports gaming. That document was a notice of intent rather than a final adjudicated $5 million penalty, an important procedural point as the dispute continues.
Ohio Is Threatening Penalties That Could Scale With Operator Activity
The October 2 letters go beyond demanding withdrawal of the sports products. The commission warns that failure to comply could lead to administrative, civil, nuisance or criminal proceedings under Ohio law.
Its civil penalty authority could also create meaningful financial exposure. The notices state that the commission may seek an amount equal to the money or value of property a company allegedly obtained or retained by offering sports event contracts to people located in Ohio. The commission also reserves the ability to pursue additional remedies involving officers, directors and parent or holding companies where applicable.
No public figure in the notices establishes how much Ohio-specific sports volume any of the 10 companies has generated. That makes the potential financial exposure impossible to quantify for now.
Why This Matters For Bettors
For an Ohio bettor, the legal takeaway is fairly straightforward: access to sports contracts on these platforms is now in immediate danger.
The commission is telling the companies to stop making the products available, and October 16 is the deadline for them to confirm that they have complied. Anyone using one of the affected platforms for sports markets should expect Ohio-specific restrictions to be a real possibility rather than a distant legal threat.
There is also a practical wrinkle for anyone holding open positions. The letters tell the companies what Ohio expects from them, but they do not spell out exactly how each platform must handle existing contracts, trading restrictions or settlement. Different companies could respond differently, so bettors with money already tied up in sports markets will need to pay attention to platform notices rather than assuming their positions will be treated the same everywhere.
The regional implications are worth watching even for bettors who never use one of these platforms. Michigan, Kentucky and Tennessee also sit within the Sixth Circuit, so federal courts in those states are now bound by the same appellate interpretation of the Commodity Exchange Act issues decided in Schuler. Their gambling laws and regulators are different, but the federal argument prediction market companies have been using just became considerably harder to win across the entire circuit.
What Happens Next
October 16 is the first practical checkpoint. The 10 recipients must confirm compliance, which could produce Ohio-specific sports market restrictions, product changes or fresh court challenges. Companies that continue operating without satisfying the commission risk the enforcement remedies laid out in the notices.
The next question is how aggressively other Sixth Circuit states use the September ruling. Tennessee already prevailed alongside Ohio in the same appellate decision, while regulators in Michigan and Kentucky now have circuit precedent available if similar disputes emerge.
Meanwhile, Kalshi's Ohio litigation continues, leaving the broader fight over state authority and federally regulated sports contracts very much alive.
Marcus has spent over 20 years navigating the legal side of online betting - from his early days consulting for offshore operators to helping licensed U.S. sportsbooks launch in regulated markets. He’s worked with compliance teams, reviewed licensing frameworks in 15+ states, and advised on some of the biggest regulatory shifts since PASPA was repealed.
At BettingScanner, Marcus serves as the voice of reason - translating legalese into plain English and helping bettors understand what’s legal, what’s risky, and where the gray areas live. If you’re ever unsure about the rules, Marcus is your man - as he probably helped write them.
