The Ohio Casino Control Commission (OCCC) told its licensed sportsbooks Monday that participation as, or association with, a prediction market operator may jeopardize a licensee’s suitability to offer sports betting in the Buckeye State, according to a letter obtained by Dustin Gouker of The Closing Line.
Key Takeaways
- Prediction market providers offer sports event contracts that are unlicensed by state regulators.
- FanDuel, one of Ohio’s licensed sportsbooks, recently announced a venture to offer prediction market services by the end of 2025.
- Ohio regulators may bar sportsbooks that offer sporting event contracts, even if not offered to Ohio residents.
The letter, signed by OCCC executive director Matthew Schuler, comes on the heels of FanDuel’s partnership with the CME Group, which will offer prediction market contracts later this year. FanDuel plans to facilitate contracts based on stock market indexes, oil and gas
prices, gold, cryptocurrencies, and “key economic indicators such as GDP and CPI.”
FanDuel’s announcement did not specifically mention sporting event contracts, but the OCCC is concerned about that possibility. After all, prediction market operator Kalshi currently offers sporting event contracts, making it a target of several state regulators, including Ohio. DraftKings, another Ohio-licensed sportsbook, is actively monitoring the prediction market space.
Prediction market operators are federally regulated by the Commodity Futures Trading Commission (CFTC). While the CFTC primarily oversees financial and economic derivatives trading, companies like Kalshi are dragging it into sports betting, which state regulators
consider to be their jurisdiction.
The OCCC letter is a big deal, primarily because the legal Ohio sports betting market is a big deal. In 2024, Ohio sports bettors wagered roughly $8.9 billion, generating more than $180 million in tax revenues. That’s a significant market for a sportsbook to potentially lose.
The OCCC letter warns, “Offering 'event contracts' on sporting events ('sporting event contracts') to citizens located within the State of Ohio without a sports gaming license violates Ohio law. See R.C. Chapter 3775. ... Plainly stated, companies that are offering sporting event contracts are operating online sports gaming. Sports gaming cannot be offered in Ohio without a license issued by the Commission. R.C. 3775.03(A). Sports gaming in Ohio must comply with all requirements in R.C. Chapter 3775 and the rules adopted thereunder.”
Geofencing may not be enough
The letter also warns that sportsbooks offering sporting event contracts outside Ohio could still risk losing their state license. So, even if a prediction market operator excludes Ohio residents, an associated sportsbook could still pay the price.
“Furthermore,” the letter states, “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 sporting event contracts in Ohio.”
