Ohio Orders Kalshi, Robinhood, and Crypto.com to Halt Sports Contracts

Ohio has become the latest state to enter the sports event contract debate. The Ohio Casino Control Commission (OCCC) has issued cease and desist notices to Kalshi, Crypto.com, and Robinhood, all of which offer sports event contracts. 

Get Out of Ohio, Orders OCCC

The state regulator announced in a release that “The Commission determined the event contracts offered by the companies on sporting events meet the definition of sports gaming under the law, which requires licensure to be legally offered in Ohio.” 

Kalshi continues to grab headlines. The company announced it will sue Nevada and New Jersey gambling regulators, who have also ordered Kalshi to cease and desist. 

Tarek Mansour, Kalshi’s outspoken CEO, posted on X: “Both states have issued cease and desist orders that fundamentally misunderstand prediction markets and undermine the foundation of U.S. financial markets, which are regulated by the federal government.” 

“We are left with no choice: sue,” he closed his remarks with. 

Ohio’s stance on the matter has been made clear. Matthew Schuler, an Executive Director for the OCCC, stated: “Purchasing a contract based on which team a person thinks will win a sporting event is no different than placing a bet through a traditional sportsbook.” 

“The only difference is that these event contracts do not have the consumer protections required under Ohio law and are accessible to Ohioans under 21 years of age. The Commission must take action to fulfill its statutory responsibilities and ensure the integrity of sports gaming in Ohio.” 

The Debate Rumbles On

Something will have to give, sooner or later, in the regulatory stand-off surrounding sports events contracts. Kalshi has baited state regulators with bolshy advertising claiming to offer “legal sports betting in 50 states.” 

Despite increasing pressure from gambling industry stakeholders, the Commodity Futures Trading Commission (CFTC) has remained tight-lipped. The regulator has previously ordered Kalshi and Robinhood to stop offering sports contracts, but after Kalshi recently self-certified and began offering the equivalent of money-line betting on March Madness, there has been no noise from the Commission.

There are a few potential outcomes if the CFTC stays silent: 

1. As well as Ohio, further state regulators order sports events contract operators to cease and desist, and the next months will be dominated by legal proceedings when operators respond through the courts.
2. Large sportsbook operators launch their own prediction market verticals. DraftKings has already filed for a product called “DraftKings Predicts” after CEO Jason Robins told investors it was a space they were keeping a keen eye on.

There is mounting pressure on the CFTC to intervene as the Commission undertakes roundtables to assess the landscape. In a letter penned by an amalgamation of several notable Tribes, sports events contracts were labelled a threat to Tribal sovereignty and in breach of state-specific gaming compacts.

How Does It End?

Major League Baseball has also voiced concerns around the lack of an integrity framework. Its response to the CFTC acknowledged that the current events contract offerings “do not carry the same integrity risks as prop bets or even single-game bets.” It then added that it expected equivalent offerings to arrive soon, and they have – right on cue. 

“As the resemblance between sports event contracts and traditional sports betting markets continues to grow, so too does the need to replicate the integrity and consumer protections that exist at the state level,” the letter continued. 

Alarmingly, the MLB suggested that it had been advised that certain exchanges and brokers have the position that they are not permitted to share information with the Baseball authority under current CFTC regulations, so any potential threats to integrity could go unreported.

One thing’s clear: global sports betting news will be dominated by events contracts in the coming months. But who would dare to predict the outcome? 

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 Ohio has become the latest state to enter the sports event contract debate. The Ohio Casino Control Commission (OCCC) has issued cease and desist notices to Kalshi, Crypto.com, and Robinhood, all of which offer sports event contracts.  Get Out of Ohio, Orders OCCC The state regulator announced in a release that “The Commission determined the
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