Ohio regulators are warning licensed sportsbooks to be very careful about how far they wade into the world of event contracts and prediction markets.
As first reported by Dustin Gouker’s The Closing Line newsletter, the Ohio Casino Control Commission (OCCC) sent a letter to licensees on Monday setting forth how the organization perceives the burgeoning market.
As SBC Americas reported last week, a number of sportsbook and daily fantasy sports operators are taking preliminary steps to be involved in the same space as Kalshi, such as registering with the National Futures Association (NFA).
OCCC says sports event contracts in Ohio could risk license
The letter noted these steps, as well as acquisitions and partnerships such as the one FanDuel undertook last week with the CME Group, which positions the market leader to quickly offer event contracts regulated by the Commodity Futures Trading Commission (CFTC).
“Plainly stated, companies that are offering sporting event contracts are operating online sports gaming,” the letter read. “Sports gaming cannot be offered in Ohio without a license issued by the commission.”
The OCCC has stated this stance before, such as earlier in the year when it issued a cease and desist to Kalshi to stop offering sports contracts in the state. That cease and desist letter did not lead to a lawsuit as in other states and Kalshi remains online in the state as the legal battle with three other state regulators proceeds.
The letter goes on to warn operators that, should they offer these contracts in Ohio, the commission will be taking that into consideration when considering the suitability of an operator to hold a license in the state.
Geolocation may not solve every problem either
There is more though.
Simply not offering sports contracts in Ohio may not be a sufficient solution, at least in the eyes of the OCCC.
“Furthermore, even if a sports-gaming licensee in Ohio geofences or takes other actions to restrict Ohioans from accessing sporting event contracts in the prediction markets that are otherwise offered to their patrons outside Ohio, this may not alleviate the suitability concern if the licensee associates, coordinates or partners with a company offering or facilitating the offering of these licensee (including in related entities or those under common ownership) with any entiti(ies) offering or facilitating the offering of unlicensed sports gaming in Ohio calls into question the reputation of the licensee and the integrity of sports gaming in Ohio. The commission will consider a licensee’s choices to associate with a company operating illegally in this state and may take administrative action against any licensee that does.”
So, if a group like CME chooses to offer sports-related contracts in Ohio separate from its partnership with FanDuel, that choice could potentially jeopardize FanDuel’s status as a sportsbook in the state.
The letter addressed sports gaming licensees but does not mention if its daily fantasy sports licensees, such as PrizePicks and Underdog, will be held to the same standard.
