Meta description: Ohio told 10 prediction-market firms to stop sports event contracts by October 16 after alleging the products are illegal sports betting.
Tags: Ohio Casino Control Commission, Polymarket, Robinhood Derivatives, Coinbase, Kalshi, CFTC
Market platform: none-if-cross-platform
Category: Regulation
The Ohio Casino Control Commission sent October 2 cease-and-desist letters to 10 prediction-market operators and brokers, including Polymarket, Robinhood Derivatives and Coinbase, demanding that they stop offering sports event contracts to Ohio users by October 16. The commission says those contracts amount to illegal sports betting under state law, Signal Ohio reported.
The notices came one week after the U.S. Court of Appeals for the Sixth Circuit ruled against Kalshi in consolidated Ohio and Tennessee litigation over sports event contracts. Together, the letters and the appellate decision give Ohio a stronger enforcement posture as state gambling regulators test whether prediction-market operators can rely on federal derivatives law to keep sports contracts open nationwide.
Which companies did Ohio order to stop sports event contracts?
According to Signal Ohio’s reporting by Jake Zuckerman, the Ohio Casino Control Commission sent October 2 cease-and-desist letters to 10 companies:
- Polymarket
- Robinhood Derivatives
- Coinbase
- Novig
- Underdog Predict
- Prophet X
- Webull Financial
- Plus500US Financial Services
- Gemini Titan
- Moomoo Financial
The list includes crypto-native trading venues, retail brokerages, sports-focused trading apps and futures intermediaries. Kalshi, the CFTC-regulated event-contract exchange already litigating with Ohio, was not among the October 2 recipients identified in Signal Ohio’s report.
Robinhood had already drawn Ohio scrutiny before the new batch of notices. Signal Ohio reported that the commission sent Robinhood a cease-and-desist letter in March 2025, making the October notice the brokerage’s second direct warning from the state gaming regulator.
What is Ohio’s legal argument?
Ohio’s position is that a contract paying out on the result of a sporting event is a sports wager when offered to people in the state, regardless of whether the operator describes it as a prediction market or a federally regulated event contract. Under that theory, operators offering the products to Ohio users are taking sports bets without the licenses, oversight and taxes required of legal sportsbooks.
The Polymarket letter, signed by Interim Executive Director Andromeda Morrison, said the company was exposing itself to civil and criminal penalties by offering sports event contracts in Ohio. Signal Ohio quoted the letter as saying: “By offering sports event contracts to persons located in Ohio, Polymarket is clearly engaged in bookmaking or facilitating bookmaking in violation of Ohio civil and criminal law.”
That framing puts Ohio’s regulator directly against the prediction-market industry’s federal-preemption argument. Operators have argued that event contracts traded through CFTC-regulated structures fall under federal commodities law, not state gambling law. Ohio is taking the opposite view for sports contracts offered to people located in the state.
How are Polymarket and Robinhood responding?
Polymarket and Robinhood are leaning on federal regulation as their answer. Polymarket told Signal Ohio that prediction markets are regulated by the Commodity Futures Trading Commission rather than by a state-by-state system. Robinhood said its contracts are CFTC-regulated and give retail customers access to prediction markets in a compliant framework. Coinbase declined to comment to Signal Ohio.
Those statements come from companies with a direct commercial stake in the outcome. If the Commodity Exchange Act preempts state gambling laws for these contracts, prediction-market operators can avoid the state licensing systems that apply to sportsbooks. If Ohio’s view prevails, operators offering sports event contracts to Ohio users may have to block the products in the state, seek a state-law path to operate, or fight the commission in court.
What did the Sixth Circuit decide in Kalshi’s Ohio case?
On September 25, 2026, a unanimous three-judge panel of the U.S. Court of Appeals for the Sixth Circuit ruled against Kalshi in consolidated appeals involving Ohio and Tennessee. Senior Judge Julia Smith Gibbons wrote the opinion, joined by Judges Eric L. Clay and Rachel S. Bloomekatz. The court affirmed the Southern District of Ohio’s denial of a preliminary injunction and vacated the Middle District of Tennessee’s preliminary injunction, according to the published Sixth Circuit opinion.
The panel held that Kalshi had not shown its sports event contracts qualify as “swaps” under the Commodity Exchange Act. The court said the statute requires an event tied to a potential financial, economic or commercial consequence, and that the link must be intrinsic to the event itself. It rejected Kalshi’s reliance on downstream economic effects for leagues, broadcasters, sponsors and local businesses.
The Sixth Circuit also said that, even if the contracts were swaps, federal commodities law would not displace the challenged state gambling rules. That holding matters for Ohio’s October 2 letters because any new federal challenge filed by one of the recipients would proceed inside the Sixth Circuit, where the latest appellate ruling favors state gaming regulators.
The appellate landscape remains split. The Ninth Circuit reached a similar result against Kalshi in its Nevada case in August, while the Third Circuit ruled differently in a New Jersey case. That divide keeps the preemption question alive nationally, but in Ohio the controlling appellate law now gives the state a decision to cite as it pressures operators beyond Kalshi.
How much are prediction-market companies spending around Ohio’s elections?
The enforcement letters landed as crypto and prediction-market-linked money moved into Ohio’s 2026 races. Signal Ohio reported, citing campaign-finance records, that Coinbase has given $33.2 million to Fairshake, the crypto industry super PAC. Fairshake plans to spend $30 million opposing Democrat Sherrod Brown in his U.S. Senate race against Republican Sen. Jon Husted.
Signal Ohio also reported that Blockratize Inc., Polymarket’s parent company, gave $1 million to a super PAC supporting House Republicans and $10,000 to Republican gubernatorial candidate Vivek Ramaswamy‘s campaign.
Sports-betting interests are active in the state too. In separate reporting on Ohio outside spending, Signal Cleveland found that one group backed by the sports betting industry has spent about $1 million on state legislative races, while another has given $650,000 to a super PAC supporting Ramaswamy.
The public campaign-finance record does not tie those contributions to the commission’s enforcement decisions. The overlap is still politically important: licensed sportsbooks and prediction-market operators are fighting over whether sports event contracts should be treated as state-regulated gambling or federally regulated derivatives.
Is the legislature also moving against prediction markets?
Yes, but on a narrower issue than the commission’s October letters. In May, Rep. Sean Brennan introduced a bill that would bar Ohio public officials and their staff from trading on prediction markets, the Ohio Capital Journal reported. The measure targets insider-trading risk in political and policy markets, not the sports-contract question at the center of the Ohio Casino Control Commission’s enforcement push.
The same Ohio Capital Journal report said more than 35,000 Ohioans placed trades on Kalshi in a single year, according to state figures. Brennan’s bill reflects a second front in the state’s prediction-market debate: whether elected officials and government staff should be allowed to trade on markets tied to public decisions, campaigns or policy outcomes.
What happens next?
The first deadline is October 16. By then, the 10 companies must respond to the Ohio Casino Control Commission’s demand that they stop offering sports event contracts in the state. The practical choices include blocking Ohio users from sports event contracts, narrowing what products are available in the state, or challenging the commission in federal court.
A new lawsuit in Ohio would start against the backdrop of the Sixth Circuit’s September 25 ruling against Kalshi. That does not end the national fight over prediction markets and state gambling law, but it gives Ohio a fresh appellate decision to cite as it pressures operators beyond Kalshi.
The next political date is November 3, when Ohio voters decide the Senate race between Brown and Husted and choose a new governor. By then, the commission should have the companies’ responses in hand, and Ohio’s event-contract fight will be moving on both legal and political tracks.
