Ohio Takes Steps to Treat Prediction Markets Like Sports Betting

(AsiaGameHub) –   New legislation in Ohio could alter the operational framework for prediction market platforms within the state, particularly those dealing with contracts tied to sporting events.

Ohio Moves to License and Tax Sports Event Contract Trading

The proposal, submitted as Senate Bill 430, aims to officially classify trading on contracts related to sports events as a form of sports gaming. Under this bill, platforms facilitating such trades would be required to obtain licenses, adhere to regulatory guidelines, and pay taxes, mirroring the obligations of existing sportsbook operators.

State Senator Bill DeMora, who introduced the bill, stated that the initiative’s objective is to ensure Ohio is prepared for potential shifts in federal legal interpretations. Ongoing court cases in the U.S. have raised questions about whether prediction markets fall under federal commodities laws or state-level gambling regulations.

DeMora has indicated that if courts permit these platforms to continue offering sports-related contracts, they should not operate outside the established betting framework. He believes the activity closely resembles traditional betting, regardless of its designation, and therefore warrants similar legal and governmental treatment.

A key provision of the proposed law is an amendment that expands the definition of sports gaming to encompass the use of prediction markets for buying and selling contracts based on the outcomes of sporting events. The Ohio Casino Control Commission, which currently oversees licensed betting operators, would assume regulatory responsibility for these types of platforms.

Ohio and Iowa Lead New Effort to Regulate Event Trading

This development occurs amidst a broader legal dispute involving companies like Kalshi, which assert that the Commodity Futures Trading Commission has jurisdiction over their services. Ohio, along with several other states, has contested this assertion, arguing that contracts linked to sports constitute gambling when offered to state residents.

Ohio regulators have already initiated enforcement actions, including plans to impose significant fines on operators accused of providing unlicensed betting products. Concurrently, differing court rulings across various jurisdictions increase the likelihood that the U.S. Supreme Court will ultimately resolve the issue.

Ohio is not alone in this regulatory push. Iowa lawmakers have enacted similar legislation mandating licensing fees and taxes for prediction market operators. This reflects a growing trend among states seeking to establish oversight over this emerging industry.

Ohio’s bill would require platforms to comply with the same regulations as sportsbooks, including age restrictions, verification processes, and responsible gambling measures. Proponents argue this will lead to more uniform rules and generate additional tax revenue for the state.

DeMora has also been involved in separate discussions concerning modifications to sports betting and broadcasting regulations. He has recently expressed concerns regarding the escalating costs associated with accessing live games through multiple streaming services. Additionally, he has voiced criticism of certain gambling proposals, suggesting they could negatively impact both consumers and the industry.