Developing Ohio Sent Cease-and-Desists to Ten Prediction-Market Operators and Deliberately Left Kalshi Off the List

Read the list before you read the press release.

The Ohio Casino Control Commission's cease-and-desist letters went out on Friday, October 2, signed out alongside Governor Mike DeWine and commission chair Thomas Stickrath. Ten recipients: Coinbase, Gemini Titan, MooMoo Financial, Novig Betting, Plus500US, Polymarket, Prophet X, Robinhood Derivatives, Underdog Predict and WeBull Financial. Each has until October 16 to confirm in writing that it has stopped offering sports event contracts in Ohio. The commission's interim executive director, Andromeda Morrison, put it without decoration: "The Commission expects these entities to cease their illegal gambling activity in Ohio immediately."

Kalshi is not on the list.

That is the news. Ohio spent a year and a federal appeal fighting Kalshi, won on September 25, and then issued its first post-victory enforcement wave to ten companies that are not Kalshi. Five of them — Robinhood, Webull, Moomoo, Plus500 and, in the crypto variant, Coinbase and Gemini — do not list sports event contracts at all. They route orders into venues that do.

Two different legal theories, and only one of them was decided in September

What the Sixth Circuit held on September 25 was about the contracts. Sports event contracts, the panel said, are not swaps within the meaning of the Commodity Exchange Act. It then added an alternative holding that matters more over time: even assuming they were swaps, the CEA neither expressly nor impliedly preempts a state's gambling law. Ohio's denial of an injunction was affirmed; Tennessee's grant was vacated.

Neither of those holdings is about intermediaries. Kalshi is a designated contract market. Robinhood Derivatives is a futures commission merchant. The first lists a product; the second accepts a retail customer's order and sends it to the venue. A state telling a DCM that its product is a bookmaking operation is one collision with federal law. A state telling an FCM that it cannot route a customer's order to a federally designated exchange is a different and, on its face, more aggressive one — it reaches conduct the CFTC regulates directly, by an entity the CFTC licenses, in a transaction that occurs on a venue the CFTC designated.

Ohio's answer is in the letters, and it is a statutory one rather than a constitutional one. The commission's operative sentence demands each platform "cease and desist from offering ... sports event contracts in Ohio," and the reasoning it gives is purely functional: "the ultimate result is money being won or lost based on the outcome of a game or a team or player's performance. Plainly stated, [the company] is operating online sports gaming." Ohio's gaming statutes reach anyone offering unlicensed sports gaming. If the Sixth Circuit is right that these are wagers rather than swaps, then the broker is not an intermediary in a derivatives transaction. It is a bookmaker's storefront, and the exclusive-jurisdiction argument has nothing left to attach to.

That is a coherent theory. It is also untested, and it is the part of this that will be litigated if anybody litigates it.

The reason to think nobody will

Here is the commercial logic, and it is why the list looks the way it does.

For Kalshi, sports event contracts are the business. For Robinhood, Webull, Moomoo, Plus500 and Coinbase, they are a line item — a 2025-26 product extension bolted onto a brokerage whose revenue comes from equities, options, crypto and payment for order flow. Ask a general counsel at a public broker whether it is worth a declaratory-judgment action against a state attorney general, a nuisance claim, and a disclosable regulatory dispute in an SEC filing, in order to preserve Ohio sports event contracts. The answer writes itself. Michigan already got that answer from Robinhood in September without a courtroom.

So Ohio has selected defendants by willingness to fight rather than by size of offence. The threatened remedy underlines it: the commission reserves "all legal remedies and actions" and specifically the power to seek fines "equal to the money or value of property" obtained from offering the contracts. That is a disgorgement theory with no cap, pointed at companies for whom the contested revenue is small and the exposure is not. It is designed to make exit cheaper than argument.

Leaving Kalshi off is the other half of the same move. Kalshi has already sued Ohio and lost, and in April the commission served it with notice of a proposed $5 million penalty for operating unlicensed sports gaming in the state since January 2025 — a notice signed by Matthew Schuler, then the commission's executive director and now the named respondent in the Sixth Circuit caption. A fresh letter adds nothing to a record that already exists and would hand Kalshi a clean new filing to appeal from. Ohio does not want the defendant that will litigate. It wants the nine that will quietly geofence.

The strongest argument against what Ohio is doing

We have written before that criminalising federally licensed exchanges is bad policy, and this extends it to federally licensed brokers, so state the other side properly.

If the brokers fold, the question of whether a state may order a CFTC-registered FCM to refuse an order destined for a designated contract market never gets answered. It gets settled by attrition, jurisdiction by jurisdiction, through letters that no court reads. The federal preemption question is genuinely hard — the Third Circuit went the other way in April, and New Jersey's petition in No. 26-299 is sitting at the Supreme Court precisely because two circuits now disagree. Resolving a hard federal question through the selective targeting of parties who cannot afford to answer is not enforcement of a settled rule. It is the manufacture of one.

And the asymmetry is visible on the Supreme Court's own docket. The National Council of Legislators from Gaming States filed an amicus brief supporting New Jersey on September 22. The International Association of Gaming Regulators and the North American Gaming Regulators Association filed jointly on October 2 — the same day Ohio's letters went out. The Indian Gaming Association, the National Congress of American Indians and the Washington Indian Gaming Association have been assembling a tribal brief since early September, due no earlier than today. Kalshi's brief in opposition is not due until November 9. The state and tribal side is filing; the industry side is waiting.

Here is where we land. Ohio's statutory theory about brokers may well be right, and we think the Sixth Circuit's alternative holding is the strongest reasoning anyone has produced on this question so far. But a regulator that selects its defendants by their unwillingness to appear in court is choosing not to find out. If sports event contracts are illegal gambling in Ohio, the company that has said so loudest and longest ought to be first on the list, not absent from it.

The other thing that happened today

While Ohio's deadline clock started, Kalshi gave $3 million to Housing Works in New York — the largest single-donor gift in the nonprofit's 36-year history, paired with a multi-year partnership on healthcare access and job training. Chief executive Tarek Mansour: "These are our neighbors. This is a city where two people in a small apartment can build a company, and it must be a city where everyone gets a fair shot."

New York sued Kalshi in July, through Governor Kathy Hochul and Attorney General Letitia James, calling it an illegal gambling operation. The company remains live to New Yorkers over 18 while that case proceeds.

Both things can be true: the money is real and goes to an organisation that will do something useful with it, and the timing is a lobbying decision. Kalshi is fighting a dozen states at once and has worked out which battles are legal and which are political. Ohio's letters are the legal front. A gift to a New York charity is the other one. Companies that are confident of winning on the law do not usually need to run both.

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Editor's note: TrueEdge builds odds and pricing tools and earns affiliate commissions from licensed sportsbooks, which compete directly with the companies named above. This piece takes a position on enforcement policy and readers should weigh it accordingly.