Ohio warns licensed betting companies about prediction markets

The Ohio Casino Control Commission (OCCC) has issued a stern warning to sports betting companies licensed in the state. Companies that offer trading in prediction markets based on sporting events, or that provide services to those markets, risk their licenses. The letter dated October 20 was signed by the agency's Interim Executive Director Andromeda Morrison, who wrote that she has "deep concern."

According to reports, some Ohio operators provide liquidity, market making, integrity monitoring and data security services to prediction platforms that offer sports markets in the state. In September, the federal appeals court in Ohio ruled that sports event contracts do not fall under the definition of "swap," which is within the exclusive jurisdiction of the Commodity Futures Trading Commission. The ruling confirmed Ohio's authority to enforce its sports betting laws.

The OCCC oversees 13 online betting operators, including FanDuel and DraftKings. These two companies continue to run sports prediction markets in states that have no sports betting license. In early October, the agency had sent cease-and-desist notices to 10 sports prediction platforms operating in the state.

Morrison stated that a licensed company supporting unlicensed sports gaming activity would be questioned on character, integrity and reputation. Companies that do not end that activity immediately may have their suitability review reopened. A finding of unsuitability could lead to the suspension or revocation of a license.

Ohio will elect a new governor on November 3. Republican Governor Mike DeWine, who is term-limited, called signing the sports betting law in January his biggest mistake and said it has created a "huge problem" among young men.