Ohio sends cease-and-desist letters to 10 prediction market platforms
Ohio regulators sent cease-and-desist letters to 10 prediction market platforms on October 9, following a Sixth Circuit ruling that Kalshi's sports event contracts remain subject to Ohio and Tennessee gambling laws. The enforcement action cites Robinhood's website, which discloses that the company offers sports event contracts as a futures commission merchant through ForecastEX. The targeted platforms have 14 days to comply or face escalation.
Ohio's crackdown brings Robinhood into the state enforcement vortex that has already trapped Kalshi and threatens Polymarket. The letters give 14 days to comply, forcing immediate geofencing decisions that fragment national markets into state-by-state availability. Each new state that copies this gambling-framing theory deepens the legal burden for every CFTC-registered platform.
Operators must now fund parallel state court defenses, product withdrawals, and possible Supreme Court petitions simultaneously. Smaller venues without Robinhood's legal budgets face the steepest pressure to retreat first. A compliance cascade before the October 16 deadline would validate Ohio's theory and invite copycat actions from attorneys general watching the returns.
Related #5 documents identical legal pressure on Polymarket from New York's dueling lawsuit over state gambling authority, as both platforms face parallel state enforcement despite holding CFTC registration.