- Ohio Casino Control Commission sent cease-and-desist notices to three companies
- The commission ordered Robinhood, Kalshi, and Crypto.com to cease its sports event contract markets
- Ohio joins New Jersey and Nevada in ordering Robinhood and Kalshi to cease the markets
Ohio gaming regulators are now taking their shot at shutting down sports event markets in the Buckeye State.
The Ohio Casino Control Commission announced it has sent three cease-and-desist notices to Robinhood, Kalshi, and Crypto.com, ordering the companies to remove their sport event prediction contract markets from the state.
The commission determined that the markets “meet the definition of sports gaming under the law, which requires licensure to be legally offered in Ohio.”
Joining Nevada, New Jersey
The Ohio Casino Control Commission has joined Nevada and New Jersey gaming regulators in ordering the companies to cease the markets, determining they are too close to licensed sports betting.
“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,” said Ohio Casino Control Commission Executive Director Matthew Schuler in a press release. “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 commission has ordered the companies cease the markets no later than Monday, April 14.
The commission is also the first state in the country to send a cease-and-desist to Crypto.com to prohibit its sports event contract markets. Crypto.com was the first company to make the markets available to customers this past December.
In the cease-and-desist notices, the Ohio Casino Control Commission warns the three companies that it can impose a “civil penalty or fine in an amount equal to the money or value of the property” the company has unlawfully obtained or retained by offering the sports event contracts to the citizens of Ohio.
Schuler also took aim at the companies offering their contracts to Ohio citizens under the age of 21, noting in the cease-and-desist orders it is a “flagrant disregard of Ohio’s statutory gambling age limit.”
A failure to company with the notices may result in the commission “pursuing all legal remedies and actions” against the companies.
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Will Kalshi Sue Ohio Casino Control Commission?
Following the latest round of cease-and-desist notices, it remains to be seen if Kalshi will follow suit in Ohio and sue the regulatory gaming body the same way it did in New Jersey and Nevada.
KalshiEX filed lawsuits against both the New Jersey Division of Gaming Enforcement (NJ DGE) and Nevada Gaming Control Board (NGCB) this past week for cease-and-desist notices sent to the company regarding their sports event prediction markets.
The company believes neither of the state regulatory bodies have the right to intrude on the government’s “exclusive” authority to regulate prediction markets.
Counsel for Kalshi argues that Congress previously gave the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction to regulate futures trading on approved exchanges. As the CFTC has allowed Kalshi to launch its sports event contract markets, state law cannot “intrude on the comprehensive federal scheme for regulating designated exchanges.”
Ohio regulators have recently issued cease and desist orders to popular trading platforms Robinhood, Kalshi, and Crypto.com for offering sports event markets to users in the state. The Ohio Department of Commerce’s Division of Securities cited concerns over the platforms’ lack of registration and compliance with state laws regarding the trading of securities.
Sports event markets, also known as prediction markets, allow users to bet on the outcome of various sporting events. While these markets can be a fun and potentially lucrative way to engage with sports, they also come with significant risks. Regulators in Ohio are particularly concerned about the potential for market manipulation and insider trading in these markets.
Robinhood, Kalshi, and Crypto.com are all well-known platforms that offer a wide range of trading options to users. However, their foray into sports event markets has raised red flags with regulators in Ohio. The cease and desist orders require the platforms to immediately stop offering these markets to users in the state and to comply with all relevant securities laws.
In response to the orders, representatives from Robinhood, Kalshi, and Crypto.com have stated that they are working closely with Ohio regulators to address their concerns and ensure compliance with state laws. They have also emphasized their commitment to providing a safe and secure trading environment for their users.
While the cease and desist orders may come as a disappointment to users who enjoy trading on these platforms, it is important to remember that regulators have a duty to protect investors and ensure the integrity of financial markets. By cracking down on unregistered and non-compliant trading activities, Ohio regulators are sending a clear message that they take their oversight responsibilities seriously.
In the meantime, users in Ohio who are interested in trading sports event markets should exercise caution and ensure that they are using platforms that are fully compliant with state laws. It is always a good idea to do thorough research before engaging in any form of trading or investing, and to seek advice from a qualified financial professional if needed.
Overall, the cease and desist orders issued to Robinhood, Kalshi, and Crypto.com serve as a reminder of the importance of regulatory compliance in the world of trading and investing. While sports event markets can be an exciting way to engage with sports, it is crucial for platforms to operate within the bounds of the law to protect investors and maintain market integrity.
