Kalshi, Robinhood, and Crypto.com Face Shutdown in Ohio
Ohio has ordered Kalshi, Robinhood and Crypto.com to shut down their prediction market platforms in its jurisdiction.
LISTEN TO THIS ARTICLE:Just when one thought the controversy surrounding sports event contracts couldn't get any more intense, Ohio's latest enforcement action has turned up the heat.
On Monday, the Ohio Casino Control Commission (OCCC) announced that it has issued cease-and-desist notices to the firms, ordering them to halt trading on sports-related event contracts.
According to the regulator, the event contracts the companies offer qualify as sports gaming and require a license to operate under Ohio law.
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. 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 latest development makes Ohio the third state to take action against Kalshi, following similar moves by Nevada and New Jersey. Robinhood also received a cease and desist order in New Jersey and faces a subpoena in Massachusetts. This is the first time a state regulator has targeted Crypto.com concerning its sports-related offerings.
The three companies have been given a deadline of Monday, April 14, to respond to the OCCC and comply with its demands.
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Kalshi Fights Back
However, Kalshi has responded to the enforcement notice it received in Nevada and New Jersey by taking the two states to court. The firm alleged that the states are exceeding their authority and violating its federal rights to offer event contracts.
The suit asserts that Congress has the sole authority over event contract platforms and that federal CFTC regulations supersede conflicting state gaming laws.
Both states have issued cease and desist orders that fundamentally misunderstand prediction markets and undermine the foundation of U.S. financial markets, which are regulated by the federal government. We are left with no choice: sue.
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