Ohio Casino Control Commission Raises Red Flags on Prediction Markets Amid Operator Interest
As FanDuel prepares to unveil new event-trading markets, the Ohio Casino Control Commission (OCCC) has issued a stern warning to sportsbooks about the burgeoning field of prediction markets.
In a recent communication directed at sports betting operators, the OCCC made it clear that engaging in prediction markets without appropriate licensing is unacceptable. This advisory, penned by OCCC Executive Director Matthew Schuler, marks the regulatory body’s proactive stance on what it perceives as a potential risk to its licensing framework.
The Commission cautioned that any sportsbook venturing into event trading without prior approval could jeopardize its operational license. The letter emphasized that various prominent sportsbooks have shown interest in offering contracts on sports events beyond their current regulatory scope.
"The Commission is aware that some sports gaming licensees are contemplating entry into the prediction market domain. There have been indications that well-established sportsbooks might seek to provide contracts related to sporting events outside of their licensing with the Commission," the letter outlined.
It clarified that decisions to introduce sporting event contracts—whether through direct offering or partnerships with related entities—will be scrutinized closely. Such actions may influence the assessment of an operator’s ongoing suitability for licensure.
Previously, the OCCC addressed similar concerns by sending a cease-and-desist notice to Kalshi, a platform that operates in a handful of states. Kalshi argues that its operations fall within the legal purview of the U.S. Commodity Futures Trading Commission, thereby asserting that prediction markets can legally function nationwide.
Is the OCCC Responding to FanDuel’s New Initiative?
In a significant development, FanDuel’s parent company, Flutter Entertainment, recently announced a collaboration with CME Group to create an event-based market product aimed at FanDuel patrons. While specific sports events were not part of the initial offering—set to include predictions regarding commodities and financial indices—FanDuel has indicated plans to roll out this service later this year.
Flutter’s CEO, Peter Jackson, hinted at the strategy during an earnings call, stating that the company is closely monitoring the evolving landscape of prediction markets.
FanDuel’s interest in prediction markets is shared by other industry titans. DraftKings’ CEO, Jason Robins, also voiced support for incorporating these markets into sports betting discussions during recent financial updates.
Rising Popularity of Prediction Markets Amid Regulatory Challenges
Despite the OCCC’s warnings, the interest in prediction markets continues to grow among sportsbooks. New platforms like Kalshi have gained traction, attracting substantial investor interest while also facing a wave of regulatory challenges, including legal disputes arguing that predicting outcomes of events constitutes illegal sports betting in some jurisdictions.
Kalshi commenced its offerings of sports event contracts earlier this year and has been actively expanding its services, even in states like California and Texas where sports betting remains prohibited.
The trend toward accessible prediction markets in the U.S. shows no signs of slowing. Recently, Robinhood announced plans to incorporate Kalshi’s football contracts into its app for the upcoming season, further signaling a shift in market dynamics.
In light of these developments, the NCAA has expressed deep concerns regarding the impact of online prediction markets on fair competition and the safety of student-athletes. NCAA Senior Vice President Tim Buckley emphasized the organization’s commitment to monitoring this evolving market, highlighting an ongoing effort to establish regulations that safeguard the integrity of college sports.