Ohio’s gambling regulator goes after Kalshi

• Ohio becomes the latest state to go after Kalshi
• Kalshi has generally denied gambling regulators’ right to intervene in its business
• Ohio and Kalshi will most likely end up trading legal blows in court

The gambling watchdog of the state of Ohio, the Ohio Casino Control Commission (OCCC), has become the latest to issue a cease-and-desist letter against Kalshi, a prediction marketplace.

Kalshi is once again under scrutiny – this time in Ohio

The cease-and-desist letter joins the efforts mounted by the Nevada Gaming Control Board and the New Jersey Division of Gaming Enforcement over the past weeks, which saw the platform fight back and file separate lawsuits against the watchdogs.

In a statement provided by the OCCC, the regulator argued that the company has overstepped its legal right to operate by offering March Madness prediction markets.

"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 OCCC Executive Director Matthew Schuler, who signed the statement, and elaborated:

"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 couched its case in roughly the same terms and language as have the NGCB and the DGE, which will raise the stakes for Kalshi as well as decide on the regulators' future ability to step in and regulate prediction platforms.

Ohio, though, is acting against Robinhood as well as Crypto, on top of Kalshi, adding that it would require a written response in which each company confirms that it has ceased operations in the state.

Kalshi has pushed back time and again, arguing that gambling regulators have no right to rule in such matters and that they were subject, instead, to oversight from the Commodity Futures Trading Commission (CFTC).

Gambling regulators should steer clear, Kalshi says

Kalshi and the CFTC have taken a long time to settle the matter, and the case is still ongoing, but the platform has been allowed to continue offering prediction markets. Now, it’s down to local gambling regulators to play gatekeeper.

Will states succeed where federal oversight has mostly given ground to Kalshi? Kalshi has elicited rebuttal from tribal operators, sportsbooks, and lawmakers, as well as regulators, but it has maintained a strong operational momentum.

As of today, Kalshi is said to have generated a trading volume of $320m on March Madness future contracts, which are not the same as gambling. Kalshi has not, as of right now, announced a case against the OCCC, but it is likely to push back.

Image credit: Unsplash.com