Sportsbook operators in Ohio face a warning for offering prediction markets
Ohio Governor Calls for Ban on Prop Bets, Complicating Sports Betting Industry
In a recent development, the Ohio Casino Control Commission (OCCC) has issued a warning to licensed sportsbook operators, raising concerns about participation in prediction markets. This comes as Ohio's governor called for banning prop bets earlier this month.
The OCCC's letter warns against sportsbooks collaborating with prediction platforms without explicit authorization. It also states that operators with an existing license may conduct prediction markets under the same license, but this is not explicitly stated. The letter does not specify whether a second license is required for offering prediction markets.
The recent move by the OCCC comes at a time when Ohio is increasing its control over the sports betting sector. Ohio, one of the states with one of the biggest legal sports betting markets in the US, is now one of seven states that have issued cease-and-desist letters to prediction markets, including Kalshi, one of the largest prediction markets that has recently entered the sports betting industry.
The increased control over the sports betting sector continues with a focus on limiting participation in prediction markets. The regulatory requirements for offering prediction markets under an existing license remain unclear.
The OCCC's warning could have far-reaching implications. If sportsbooks are found to be offering sporting event contracts, partnering, coordinating, or associating with entities involved in offering such contracts, their ability to operate in Ohio could be at risk.
The issue complicates the industry's expansion efforts. Sportsbooks face a difficult decision: explore new revenue opportunities in prediction contracts and risk regulatory consequences, or avoid them to safeguard current licenses.
The governor's call for banning prop bets is due to increasing concerns over player harassment, especially in college sports. The OCCC's letter also warns against the potential risks associated with prediction markets, citing the possibility of market manipulation and other illegal activities.
This applies even if the licensee operates through their own Designated Contract Market (DCM) or Futures Commission Merchant (FCM), or through entities under common ownership or related operations. Whether sportsbook operators in Ohio need a separate license for betting markets or can offer these under their existing license depends on the state's regulatory framework and licensing requirements for different types of betting offerings.
Ohio's stance on prediction markets could affect operators currently using prediction markets in other states. As the sports betting industry evolves, it is essential for operators to stay informed about regulatory developments and comply with the rules to ensure their continued operation.
