Ohio cracks down on Kalshi Robinhood and Crypto dot com
The gloves are off. Ohio has stepped into the prediction market fight, swinging hard. This week, the Ohio Casino Control Commission (OCCC) issued cease-and-desist orders to Kalshi, Robinhood, and Crypto.com. Ohio law considers the sports-related event contracts offered by all three platforms to be unlicensed sports betting.
And it’s not just Ohio. They’re the third heavyweight to enter the ring, following similar action in Nevada and New Jersey. This is no isolated jab. It’s becoming a coordinated crackdown. The Nevada Gaming Control Board (NGCB) recently entered a proposed Stipulation for Settlement with Resorts World Las Vegas (RWLV) and its parent companies following a disciplinary complaint.
Matthew Schuler, Executive Director of the OCCC, didn’t mince words. “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,” he said. His point? These aren’t innovative FinTech products. They’re bets in disguise.
What counts as a bet, and what doesn’t?
This whole storm boils down to one question. Are prediction markets a clever new asset class — or just sports betting in disguise? Kalshi thinks it’s innovation. The states? Not so much.
Kalshi, a CFTC-regulated exchange, says it has driven over $373 million (€343.16 million) in trading volume on March Madness contracts alone, as per figures published on its website. Their model is peer-to-peer. There’s no house. They argue that users trade, not wager, contracts. But regulators aren’t buying it.
Nevada called it illegal. New Jersey said it violates the state constitution. Ohio calls it sports betting without a licence. Robinhood partnered with Kalshi and has already pulled March Madness markets in New Jersey. The crossfire now ensnares Crypto.com after it quietly offered similar products, including Super Bowl contracts earlier this year, before the NCAA markets launched.
The OCCC has given the trio until 14 April to comply. If they don’t comply, the consequences could be steep — both civil and criminal. Ohio’s position is clear. This isn’t up for debate.
State pushback meets Kalshi’s legal counter
Kalshi is standing its ground. CEO Tarek Mansour has launched lawsuits in Nevada and New Jersey. He’s also taken to social media, calling prediction markets the “quintessential truth machines” in an age of misinformation. To him, state regulators are stuck in the past.
Kalshi insists it is fully compliant with federal regulations. It says the Commodity Futures Trading Commission (CFTC) holds jurisdiction. “We need prediction markets now more than ever,” Mansour posted on X. “While they are not our regulators, 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 have made every effort to engage proactively with both Nevada and New Jersey and try to educate them about prediction markets, how they are regulated, and how critical they are… but our words fell on deaf ears.” The firm’s contracts, Kalshi argues, are federally authorised financial products, not sports wagers. That framing is now being tested in courtrooms across the country.
But there’s a twist. Congress is now watching, too.
Representative Dina Titus of Nevada has formally petitioned the CFTC. Her letter calls for a nationwide stay on all sports and political contracts. She says Kalshi is trying to dodge state gambling laws by waving a federal licence like a free pass. In her letter, she points to Kalshi’s own court filings, where the company calls sports “games” — a word that could make the whole operation illegal under federal rules.
In short, she’s asking the CFTC to shut Kalshi down. Not just in Nevada. Everywhere. She writes: “Kalshi appears in violation of Commission laws and regulations.” In her view, the company’s “so-called voluntary compliance with some state laws does not change that Kalshi has not registered with the gaming regulator in any state.”
Power struggles and silence at the top
This isn’t just a compliance issue anymore. It’s a turf war. State regulators say they’ve been bypassed. And lawmakers say the system is being gamed.
The CFTC, for now, says nothing. A roundtable was promised months back. But with lawsuits piling up and states stepping in, the Commission is still nowhere to be seen.
The timing couldn’t be more explosive. March Madness is one of the biggest gambling events in the U.S. calendar. Kalshi’s platform handled hundreds of millions in trades during the tournament, outpacing some sportsbook volumes. For regulators, that’s not a curiosity. That’s a warning sign.
It’s not just about money. It’s about control.
Integrity fears and tribal concerns grow
Major League Baseball has entered the fray. It says these markets don’t have proper integrity checks. Worse still, some platforms might not be legally required to share data, so threats to fair play could slip through the cracks. Tribal groups have raised similar concerns. They say these contracts cross the line and could weaken long-standing agreements between states and tribal nations.
The American gambling landscape is already fragmented. State lines divide who can offer what and to whom. Add a new, federally regulated product that sidesteps age limits, tax regimes, and licensing requirements, and you’ve got a recipe for chaos.
And yet, this chaos could be a goldmine.
If Kalshi wins, the doors open wide. DraftKings is already preparing its move. CEO Jason Robins confirmed the company has filed to launch “DraftKings Predicts,” a similar exchange-based platform. Many in the industry believe other major players will soon make their move. Why wouldn’t they? It’s fast. It’s scalable. It’s untapped.
But there’s a risk here, too. Because if Kalshi loses? The entire model could collapse. This entire model could be blocked outright or tied up in red tape before it even finds its feet. Right now, no one knows which way it’ll go.
No one dares to predict what comes next
So what started as a clever new product, marketed with slogans like “legal betting in 50 states,” has become something else entirely. A test case. A regulatory landmine. A constitutional puzzle.
Kalshi says it’s misunderstood. Regulators say it’s unlawful. Lawmakers say it’s dangerous. And sportsbook operators are watching it all, ready to pounce if the tide turns.
Ohio may just be the third state to throw a punch. But this fight is far from over. And as for who wins?
No one’s brave enough to predict that just yet.
