Ohio’s top gambling authority has warned licensed sportsbooks to avoid venturing into the realm of sports-based prediction markets, or risk serious consequences to their operating status. In a letter dated Monday, the Ohio Casino Control Commission (OCCC) issued a clear message: offering “sporting event contracts” through any form of prediction market – even indirectly – may be considered a violation of state law.
This latest move comes amid growing interest from major sportsbook operators like FanDuel and DraftKings in expanding into prediction markets. However, the OCCC has joined six other U.S. states in issuing cease-and-desist orders to firms like Kalshi, which have been accused of offering unlicensed sports betting disguised as prediction contracts.
License Risk for Unapproved Prediction Market Activity
The OCCC’s letter emphasized that licensees seeking to introduce sporting event contracts, either through direct ownership or affiliation with Designated Contract Markets (DCMs) or Futures Commission Merchants (FCMs), could see their suitability to operate in Ohio called into question.
“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) … the Commission will consider these choices as it evaluates the continued suitability of a sports gaming licensee, including key employee licensees, to maintain a license,” the letter stated.
The Commission further noted that even if these offerings are geofenced to prevent access from within Ohio, that action may not be sufficient to remove regulatory concerns, depending on the nature of the relationships and structures involved.
Prediction Markets Blur Regulatory Lines
The core concern lies in the way these event contracts function. As defined by the OCCC, prediction markets allow users to place money on specific outcomes — such as which team will win, or whether a player reaches a statistical milestone — with winnings tied to real-world results.
The Commission made it plain: “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.”
Such arrangements are seen by Ohio regulators as sports gambling in all but name, and any sportsbook seen to be participating, even indirectly, could face administrative action.
Industry Players Hesitant Amid Regulatory Uncertainty
FanDuel recently signaled interest in entering the prediction market space via a new partnership — although their initial offerings do not involve sports. DraftKings has also reportedly explored options to engage with this emerging sector. But with Ohio’s warning now on the record, those efforts may face major obstacles.
The letter’s implications extend beyond Kalshi and prediction market startups. It effectively discourages any Ohio-licensed sportsbook from affiliating with unlicensed operators, potentially isolating prediction market ventures from mainstream betting platforms.
“Any business relationship between an Ohio sports gaming licensee (including its related entities or those under common ownership) with any entit(ies) 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,” the Commission stated.
Source:
“News: Ohio Regulator Warns Sportsbooks About Offering Prediction Markets”, closingline.substack.com, August 25, 2025
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