Kalshi, Robinhood, and Crypto.com have all been the target of enforcement actions by Ohio’s gaming regulator, which claims that they provide prediction markets that are equivalent to sports betting.
According to a press statement that SBC Americas saw, the Ohio Casino Control Commission (OCCC) acknowledged on Monday that it had issued cease-and-desist letters requesting that the companies quit trading on contracts for sporting events.
Following Nevada and New Jersey, the OCCC is the third state regulator to formally initiate action against Kalshi. In addition to receiving a C&D from the New Jersey Division of Gaming Enforcement (DGE), Robinhood has also received a subpoena in Massachusetts. The first state to formally announce that it is pursuing Crypto.com is Ohio.
The deadline for Kalshi, Robinhood, and Crypto to reply to the OCCC and meet the requirement is Monday, April 14.
Each of the three businesses has been providing sports
In February, Kalshi informed the Commodity Futures Trading Commission (CFTC) that it will be self-certifying its capacity to offer trading on markets similar to single-event and prop-like betting. Kalshi has been providing sports futures markets since before the Super Bowl. During March Madness, it has started providing “to win” wagers on specific games.
Additionally, the business is now powering a number of sports-related contracts on Robinhood’s platform. Just in time to begin betting on the NCAA action, Robinhood released a new sports markets center on its app.
Since late last year, Crypto.com has provided sports trading services, and more recently, it has started to offer markets that are similar to NBA moneyline betting. In January, the CFTC began reviewing the company’s Super Bowl and other sports contracts and asked that it shut down the markets, which it did not.
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CFTC’s decision “contradicts recent federal court rulings and conflicts with the current Commission’s own statement set forth in its recent rule proposal,” according to a statement made at the time to SBC Americas by Crypto.com.
Although Robinhood withdrew its college basketball markets in New Jersey following that state’s letter, the three prediction market operators still provide sports trading in all 50 states. The sports betting law of New Jersey expressly forbids placing bets on college events that are held in the state.
“No different” from wagering on sports
“Trading on contracts based on which team will win a certain contest is no different than placing a bet through a traditional sportsbook,” stated OCCC Executive Director Matthew Schuler in a press statement.
“The sole distinction is that these event contracts are available to Ohioans under the age of 21, and they lack the consumer protections mandated by Ohio law,” he continued. “The Commission must act to uphold the integrity of sports gaming in Ohio and fulfill its statutory obligations.”
Kalshi launching a counterattack
Kalshi is bringing a federal lawsuit against the casino authorities in Nevada and New Jersey in reaction to their enforcement actions, claiming that they are going too far and violating the company’s federal right to provide event contracts.
According to Kalshi’s complaint, state gaming laws are superseded by Congress’s authority to oversee the CFTC and to provide and govern event contract platforms.
“We have before been attacked, engaged in combat, and prevailed. This time won’t be any different,” Tarek Mansour, CEO of Kalshi, stated.
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