Ohio’s gaming regulator has launched enforcement action against each of Kalshi, Robinhood and Crypto.com, accusing them of offering prediction markets that equate to sports betting.
The Ohio Casino Control Commission (OCCC) confirmed on Monday it sent cease-and-desist notices to demand that the firms stop offering trading on sports-related event contracts.
The OCCC is the third state regulator to officially take action against Kalshi, after Nevada and New Jersey did the same. The New Jersey Division of Gaming Enforcement (DGE) also sent a C&D to Robinhood, and that company has also been subpoenaed in Massachusetts. Ohio is the first state to publicly declare that it is also chasing Crypto.com.
Kalshi, Robinhood, and Crypto have until Monday, April 14 to respond to the OCCC and comply with the demand.
All three companies have been offering sports
Kalshi has been offering sports futures markets since before the Super Bowl and told the Commodity Futures Trading Commission (CFTC) in February that it would be self-certifying the ability to offer trading on markets akin to both single-event and prop-like betting. It has been offering “to win” markets on individual games throughout March Madness.
The company is also now powering a suite of sports-related contracts on Robinhood’s platform, and the latter company unveiled a new sports markets hub in its app in time to start taking money on the NCAA action.
Crypto.com has been offering sports trading since late last year and has recently begun offering markets that resemble NBA moneyline betting. The CFTC launched a review of the company’s contracts related to the Super Bowl and other sports in January and requested the company take down the markets, which it did not.
In a statement to SBC Americas at the time, Crypto.com argued that the CFTC’s decision “contradicts recent federal court rulings and conflicts with the current Commission’s own statement set forth in its recent rule proposal.”
The three predictions market operators currently offer sports trading in all 50 states, although Robinhood pulled its college basketball markets in New Jersey after that state’s letter. New Jersey sports betting law explicitly prohibits wagering on college events taking place within the state.
‘No different’ from sports betting
OCCC Executive Director Matthew Schuler said in a press release that customers trading on contracts based on which team will win a certain contest “is no different than placing a bet through a traditional sportsbook.”
“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,” he added. “The Commission must take action to fulfill its statutory responsibilities and ensure the integrity of sports gaming in Ohio.”
Kalshi provided a statement to SBC Americas in response. A company spokesperson said that “the threatened actions by the Ohio CCC seek to undermine not just Kalshi’s contracts, but the authority granted by Congress to the Commodity Futures Trading Commission, which has safely and effectively governed commodities markets for decades.”
Kalshi on the counter-offensive
In response to the enforcement action from Nevada and New Jersey, Kalshi is suing those states’ respective gaming regulators in federal court, alleging that they are overreaching and infringing upon the company’s federal right to offer event contracts.
Kalshi’s complaint argues that Congress has the exclusive right to confer and control event contract platforms, and that Congress’ right to regulate the CFTC supercedes state gaming laws.
“We have been targeted before, we have fought before, and we have won before. This time will be no different,” said Kalshi CEO Tarek Mansour.
