Ohio regulator orders licensed sportsbooks to stop prediction market services

Ohio's Casino Control Commission has told online sportsbooks licensed in the state to stop providing services to prediction markets that trade on sports events, according to a letter dated 20 October from interim executive director Andromeda Morrison. The commission said licensees that do not stop such activity immediately risk having their suitability reopened, and a finding of unsuitability could lead to a licence being suspended or revoked.

Morrison's letter says she is "deeply concerned" about reports that commission-licensed sportsbooks keep serving prediction markets that trade sports event contracts. The letter describes some Ohio operators as reportedly supplying such platforms with market making, liquidity, integrity monitoring and data security for sports markets inside the state. According to the report, the commission oversees 13 online sportsbooks, among them FanDuel and DraftKings, and these continue to run sports prediction markets in states where they hold no sports betting licence.

Morrison cautioned that when a licensee chooses to serve, join forces with or back an operator of unlicensed sports gaming in Ohio, that choice bears on the licensee's character, integrity, honesty and reputation. She added that behaviour of this kind erodes public trust in the state's regulated sports gaming and fantasy contest markets.

The letter came after a federal appeals court in Ohio decided in September that sports event contracts fall short of the legal test for classification as a "swap" under the Commodity Futures Trading Commission's exclusive regulatory jurisdiction. That decision upheld Ohio's power to enforce its own sports betting laws. The commission then sent cease-and-desist notices in early October to 10 sports prediction market platforms active in the state.

Ohio will elect a new governor on 3 November, with governor Mike DeWine term-limited. DeWine has said signing the sports betting bill was a mistake, and in January said sports betting had caused a problem among young males, with many addicted and spending money they do not have.