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Read Full BioThe Ohio Casino Control Commission (OCCC) has sent a letter to licensed sportsbooks in the state, warning about offering prediction markets.
The letter, highlighted by The Closing Line, states that if a sportsbook decides to offer prediction markets, then “the Commission will consider these choices as it evaluates the continued suitability of a sports gaming licensee”.
It goes on to state that “offering or facilitating the offering of unlicensed sports gaming in Ohio calls into question the reputation of the licensee and the integrity of sports gaming in Ohio.”
Even if a sportsbook were to exclude Ohio residents from the markets, this would not “alleviate the suitability concern”.
Sports Betting Licenses Could Be At Risk
While the letter does not explicitly say that licenses would be revoked, it does make it clear that the OCCC does not welcome expansion into prediction markets.
The letter concludes by stating, “The Commission will consider a licensee’s choices to associate with a company operating illegally in this State and may take administrative action against any licensee that does.”
Ohio was one of seven states to issue a cease-and-desist letter to prediction market platform Kalshi over its sports event contracts. The OCCC also issued the orders to Robinhood and Crypto.com.
Robinhood filed lawsuits against Nevada and New Jersey regulators last week as it looks to relaunch sports markets ahead of the football season. However, there have been no court cases in Ohio between either the regulator and Kalshi, Robinhood, or Crypto.com as yet.
Sportsbooks Consider Entering Prediction Markets
The OCCC went on to say it is aware that some of Ohio’s licensed sportsbooks are making plans to partner with prediction market platforms. FanDuel signed a deal with CME last week, and Nevada’s gaming regulator also raised concerns about the partnership.
Additionally, DraftKings has apparently held talks with the platform Railbird. DraftKings CEO Jason Robins said the company was monitoring the space, but did not commit to any concrete plans.
If other states follow Ohio in saying betting licenses may be at risk, then the company may decide not to proceed with any deal. For now, FanDuel has said it will not offer sports markets through CME, which primarily deals with financial markets.
The OCCC specifically states that sporting event contracts are of concern, and state regulators are not believed to oppose betting companies partnering with financial prediction market sites.
Ohio Clampdown on Prop Bets Could Open Door For Competitors
The OCCC launched an investigation into suspicious betting involving two Cleveland Guardians pitchers earlier this month.
On the back of the betting scandals, Gov. DeWine has called for a complete ban on prop bets. Ohio already prohibits betting companies from offering prop betting on college sports, but a ban on prop bets on pro sports is unprecedented.
In the meantime, Kalshi has self-certified some touchdown prop markets, which could be available for both NFL and college games. If prediction markets can expand into prop betting, and sportsbooks are further limited, it could send users to use the sites more frequently.
The OCCC’s public stance against sportsbooks partnering with prediction market platforms further complicates the situation for licensed betting companies. Keeping licenses is, of course, essential to their survival, but not keeping up with the emergence of new markets could also be damaging.
