Recently, the Ohio Casino Control Commission (OCCC) issued a clear warning to sports betting operators in the state, stating that their gambling licenses could be at risk if they offer prediction market services without permission. This move is seen as a direct response to some operators' recent interest in event trading markets.
This warning stems from a letter signed and sent by OCCC Executive Director Matthew Schuler to several licensed sports betting companies. In the letter, he explicitly pointed out that the commission is aware that sports betting operators are considering launching prediction market contracts based on sports events outside the existing licensing scope. Any act of providing such services without approval, directly or through affiliated institutions, will be listed as a negative assessment factor during license renewal reviews.
This regulatory move almost coincides with the recent announcement by FanDuel's parent company Flutter Entertainment to form a joint venture with CME Group and plan to launch event prediction products. Although FanDuel stated that its initial products will focus on commodities and financial indices, not including sports events, the company's CEO had previously expressed interest in prediction markets during an earnings call. Competitor DraftKings' executives have also publicly discussed this area.
Prediction market platforms such as Kalshi, although regulated by the United States Commodity Futures Trading Commission (CFTC) and claimed to be legal nationwide, have been repeatedly stopped by multiple states, including Ohio. These platforms allow users to bet on predictions for various events, including sports outcomes, and are therefore recognized by many state regulatory agencies as a form of disguised sports betting.
It is worth noting that prediction markets have continued to expand against the trend recently, even attracting mainstream trading platforms such as Robinhood to join in cooperation, causing public concern from sports organizations like NCAA, worried about its impact on the fairness of games and athlete safety.
Currently, the OCCC has issued cease and desist letters to platforms including Kalshi, Robinhood, and Crypto.com, pointing out that their business models have essentially constituted sports betting and must operate with a state license by law. This letter from the Ohio regulatory agency further clarifies its stance on the legal boundaries between prediction markets and sports betting, adding new footnotes to the compliance disputes related to such businesses nationwide.
