Ohio Regulators Warn Sportsbooks on Prediction Market Partnerships

The Ohio Casino Control Commission (OCCC) has issued a warning to licensed sportsbooks that partnering with or associating with prediction market operators could jeopardize their ability to offer sports betting in the state. The notice, signed by OCCC Executive Director Matthew Schuler, was obtained by Dustin Gouker of The Closing Line.

Good to know

• FanDuel recently announced a partnership with CME Group to launch prediction market contracts.
• Ohio sportsbooks handled $8.9 billion in wagers in 2024, generating more than $180 million in tax revenue.
• The OCCC says even geofencing prediction markets outside Ohio may not resolve licensing concerns.

The warning comes shortly after FanDuel revealed plans to help facilitate prediction market contracts on financial and economic outcomes such as stock indexes, oil and gas prices, gold, cryptocurrencies, and indicators like GDP and CPI. While the announcement did not mention sports trading, regulators are concerned about the possibility, especially since Kalshi currently offers sports-related markets and has drawn scrutiny from multiple states.

DraftKings, another licensed sportsbook in Ohio, is closely watching the prediction market space as regulatory debate intensifies.

Prediction market operators fall under federal oversight by the Commodity Futures Trading Commission (CFTC), which traditionally regulates financial derivatives. However, offerings tied to sports events blur the line between financial contracts and sports betting, which state regulators argue falls firmly under their jurisdiction.

The OCCC’s letter made the state’s position clear:

“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).”

The commission further cautioned that Ohio-licensed sportsbooks could face consequences even if they attempt to block local residents from accessing sports-related prediction markets.

“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.”

For operators, the stakes are high. Ohio has become one of the top sports betting markets in the U.S., and any action that puts a license at risk could mean losing access to a market worth billions in annual handle and hundreds of millions in tax revenue.