Ohio regulators have issued a sharp warning to licensed sportsbook operators, making clear that involvement in prediction markets tied to sporting events could jeopardise their ability to operate in the state.
The Ohio Casino Control Commission (OCCC) sent its warning in a letter dated Monday (25 August), according to information provided by Dustin Gouker and The Closing Line.
The letter outlined that offering or facilitating prediction markets without proper vetting and licensing would be treated as a serious regulatory breach.
It reads, in part: “If an Ohio sports gaming licensee chooses to offer sporting event contracts in Ohio through their own DCM or FCM (or those under common ownership or operated by a related entity), or decides to associate, coordinate, or otherwise partner directly or indirectly with entities offering or facilitating the offering of sporting event contracts in Ohio, the Commission will consider these choices as it evaluates the continued suitability of a sports gaming licensee, including key employee licensees, to maintain a licence.”
The communication stressed that operators need to think twice before providing sporting event contracts through their own designated contract markets (DCM) or futures commission merchants (FCM).
The warning also covers affiliates and related entities. The result could be questions about the companies’ ongoing suitability to hold a licence, according to the OCCC.
The regulator also signalled that attempts to limit such offerings geographically would not necessarily protect an operator from regulatory scrutiny.
According to the letter, geofencing services to exclude Ohio residents or restricting access only outside the state “may not alleviate the suitability concern,” depending on how the offering is structured.
Regulators emphasised that any business relationship between licensed sportsbooks and entities providing unlicensed sports gaming in Ohio could call into question the reputation of the operator and the integrity of the state’s gaming market.
FanDuel’s CME tie-up draws scrutiny
FanDuel recently announced a partnership with CME Group, a US derivatives exchange, to launch prediction-style contracts on financial markets such as shares, commodities, and inflation.
While the company initially indicated sports were not included, the development quickly drew attention from regulators. DraftKings is also reported to be examining opportunities in this space.
Ohio is not alone in its concerns. It is one of seven states to issue cease-and-desist letters to prediction markets, including Kalshi, for allegedly offering what regulators consider to be illegal sports betting.
The OCCC’s letter makes clear that Ohio will not tolerate sportsbooks attempting to work with such platforms or building parallel prediction market offerings without explicit authorisation.
The state’s hardline position complicates the industry’s push into prediction markets, which some operators see as a potentially lucrative extension of sports betting.
Sportsbooks face a conundrum: pursue potential new revenue streams through prediction contracts and risk regulatory backlash or eschew the opportunity entirely to preserve their existing licences.
Nevada regulators also entered the debate last week, warning Flutter Entertainment, FanDuel’s parent company, against involvement in sports prediction markets.
CDC Gaming’s Buck Wargo reported that the Nevada Gaming Control Board cautioned the company after the FanDuel-CME announcement, raising concerns about its eventual plans for operating in the state.