Polymarket sues Ohio over sports betting licensing rules

Polymarket has filed a federal lawsuit against Ohio's sports betting regulations, arguing that the state's licensing requirements discriminate against interstate commerce and conflict with the Commodity Exchange Act. QCX LLC, which operates as Polymarket US, filed the complaint on 16 October in the Southern District of Ohio against Attorney General Andy Wilson, Ohio Casino Control Commission Interim Executive Director Andromeda Morrison and seven commissioners. The case, No. 2:26-cv-01502, is assigned to Judge Douglas R. Cole. Polymarket is seeking preliminary and permanent injunctions, declarations that the relevant Ohio gambling statutes and regulations are unconstitutional and preempted as applied to its operations, and attorneys' fees and costs.

The complaint landed on the same day that a deadline expired. That deadline had been created by cease-and-desist letters dated 2 October, which went to Polymarket and nine other prediction market operators and brokers. In those letters, Ohio regulators treated sports event contracts as sports gaming and told recipients to stop offering them without state licences, warning of administrative, civil and criminal penalties. According to reports, most recipients kept operating past the deadline, though Plus500US agreed to discontinue its sports contracts. Polymarket and Robinhood emphasised federal oversight of their businesses.

Polymarket's position is that the state's licensing system gives an advantage to businesses based in Ohio. Applicants for a Type A licence need a facility or business presence within the state, and regulators take applicants' contributions to the local economy into account. The number of proprietors is usually limited to 25, and national brands gain access by partnering with businesses that hold licences. The complaint further targets server requirements tied to Ohio and rules that confine customers to people located in the state.

A Sept. 25 ruling by the Sixth Circuit came before the suit was filed. In that decision, the appeals court was unanimous in finding that Kalshi's sports event contracts did not qualify as swaps under the CEA, and it held that federal law would not displace the gambling rules of Ohio and Tennessee even if the contracts had been swaps. Polymarket's reading is that later CFTC steps came after that ruling and that the matter is still open to further judicial review. The company points to an Oct. 9 interim final rule and proposal covering event contracts tied to sports, politics, culture and weather. That rule took effect Oct. 19 and keeps state-licensed sportsbook wagers and casino games outside the swap definition; comments are due Nov. 18.

On July 9, 2025, the CFTC granted Polymarket contract market status. The company's argument is that oversight of its contracts by the federal commodities regulator takes precedence over state rules. It further points to Ohio's acceptance of licensing credentials issued elsewhere and to arrangements for liquidity across state lines, which it says conflict with the state's restrictions. The company is represented by Squire Patton Boggs and Gibson, Dunn & Crutcher.

Ohio Gov. Mike DeWine described sports event contracts as “pure and simple gambling” and said noncompliant operators would face lawsuits brought by the state. “The law is very clear,” DeWine said. “The court decisions have been very clear. The attorney general of Ohio is taking actions he needs to take. These are not self-executing. You have to actually go out and file these suits, and that’s what we are going to do.”