Executive Director Matthew Schuler signed the warning letter. The Closing Line first reported it on Monday.
FanDuel’s the main target here. Last week, parent company Flutter Entertainment announced plans for event-trading markets through a joint venture with CME Group.
But FanDuel isn’t alone in showing interest. DraftKings CEO Jason Robins has also talked about prediction markets on recent earnings calls.
Why Ohio Regulators Are Concerned
The state’s worried about licensing violations. Prediction markets operate under different rules than traditional sportsbooks.
Kalshi and similar platforms get regulated by the US Commodity Futures Trading Commission. They argue this makes prediction markets legal in all 50 states.
Ohio doesn’t agree. The OCCC already sent Kalshi a cease-and-desist letter last year. Seven other states did the same thing.
The regulator’s main concern? Operators might offer prediction markets without proper Ohio approval.
What the Warning Letter Actually Says
Schuler’s letter was pretty direct about the consequences.
“The Commission will consider these choices as it evaluates the continued suitability of a sports gaming licensee to maintain a licence,” the letter states.
That includes any partnerships with prediction market platforms. Even indirect relationships could trigger license reviews.
The letter specifically mentions sporting event contracts offered through DCM or FCM platforms. It also covers companies under common ownership.
Flutter CEO Peter Jackson hinted at these plans during earnings calls. He said the company is “watching the space very closely.”
FanDuel’s initial product won’t focus on sports events. Instead, they’re planning “yes/no” predictions on commodities like oil prices and the S&P 500.
How This Affects the Broader Market
Other states are watching Ohio’s approach closely.
Prediction markets keep expanding despite regulatory pushback. Kalshi started offering sports event contracts in January and continues growing.
The platform operates even in states where sports betting remains illegal. That includes California and Texas.
Robinhood announced last week it’ll offer Kalshi’s football contracts this season. That move sparked fresh concerns from college sports.
“We will continue to analyse developments of this market,” NCAA Senior Vice President Tim Buckley told ESPN.
The NCAA called prediction markets a threat to competition integrity and student-athlete safety.
But investor interest keeps growing. Sportsbooks are clearly watching these platforms for expansion opportunities.
The question now is whether other state regulators follow Ohio’s lead. Or if prediction market operators can convince more states their products don’t need sports betting licenses.
Either way, the warning shots from Ohio suggest this fight’s just getting started.
