Ohio Senator Renews Push to Regulate Prediction Markets and Ban Election Betting, Eyes Legislative Revival in 2027

Ohio Democratic State Senator Bill DeMora is renewing his efforts to bring sports-related prediction markets under the state's gambling regulations and prohibit election betting, following a federal appeals court decision that strengthened Ohio's authority to pursue enforcement against prediction market operators.

The renewed initiative comes amid growing legal and regulatory disputes across the United States over whether platforms offering contracts tied to sporting events should be treated as financial trading venues or as gambling operators subject to state licensing requirements.

DeMora has introduced two legislative proposals designed to address the issue. Senate Bill 430 would classify contracts based on sporting outcomes as sports gaming under Ohio law, requiring prediction market operators to obtain licenses from the Ohio Casino Control Commission (OCCC) and comply with the state's existing sports betting regulations.

If enacted, the measure would bring prediction market platforms within the same regulatory framework governing licensed sportsbooks in Ohio. This would include compliance with minimum-age requirements, responsible gambling safeguards and existing enforcement provisions.

DeMora introduced SB 430 on April 27. The proposal was referred to the Senate Select Committee on Gaming on May 13 but has not progressed beyond that stage. The senator remains its sole sponsor.

His second proposal, Senate Bill 479, specifically targets election-related prediction contracts. Introduced on October 13, the legislation would prohibit contracts connected to election results, political nominations, party conventions and political appointments.

The measure is co-sponsored by Democratic Senators Nickie Antonio, Willis Blackshear Jr. and Casey Weinstein.

Ohio already prohibits licensed sportsbooks from accepting wagers on political elections. SB 479 would extend that restriction to prediction market operators, closing what DeMora considers a regulatory gap between traditional sports betting companies and platforms offering election-related contracts.

Neither proposal has received a Senate floor vote. DeMora has indicated that he intends to revive the measures in 2027 if they fail to advance during the current legislative session.

Sixth Circuit ruling strengthens Ohio's regulatory position

The senator's renewed push follows a September 25 decision by the US Court of Appeals for the Sixth Circuit involving prediction market operator Kalshi and gambling regulators in Ohio and Tennessee.

At the centre of the dispute is the classification of sports event contracts. Kalshi has maintained that its products are financial instruments regulated under the federal Commodity Exchange Act (CEA), placing them under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC) rather than state gambling authorities.

Under this interpretation, the company argues that its sports-related contracts should not be subject to state-level sports betting laws.

However, a unanimous three-judge Sixth Circuit panel rejected Kalshi's attempt to prevent Ohio and Tennessee from enforcing their gambling regulations against its sports event contracts.

The court found that Kalshi had not established that the contracts qualified as swaps under the Commodity Exchange Act. It also concluded that federal commodities legislation did not pre-empt the states' gambling regulations in the circumstances considered.

The ruling upheld the refusal to grant Kalshi a preliminary injunction in Ohio while overturning an injunction previously granted in Tennessee.

Although the decision did not settle the underlying legal dispute, it allowed both states to continue their enforcement efforts against the company.

The ruling has become an important development in the broader national debate over the regulatory status of prediction markets, particularly as different federal appeals courts have reached conflicting conclusions.

The Third Circuit previously ruled in Kalshi's favour in a dispute involving New Jersey, while the Ninth Circuit ruled against the company in litigation concerning Nevada.

New Jersey has subsequently asked the US Supreme Court to review the Third Circuit's decision, potentially giving the country's highest court an opportunity to address the competing interpretations of federal commodities law and state gambling authority.

Kalshi is also seeking further consideration of the Sixth Circuit ruling. On October 9, the company filed a petition requesting a panel rehearing and a rehearing en banc, which would involve reconsideration by the full appeals court.

On October 28, the Sixth Circuit directed Ohio and Tennessee to submit their responses by November 12. The order does not indicate that the court has agreed to rehear the case, and the September ruling remains in effect.

Ohio regulator increases pressure on prediction market operators

The legal developments have also prompted more direct action from Ohio's gambling regulator.

On October 2, the Ohio Casino Control Commission issued cease-and-desist letters to 10 prediction market operators and brokers, including Polymarket, Robinhood and Coinbase, demanding that they stop offering sports event contracts in the state.

The regulatory action followed the appeals court decision and reflected Ohio's position that sports-related prediction contracts fall within the state's gambling laws.

Robinhood's derivatives business subsequently agreed to stop offering new sports event contracts in Ohio by November 2, according to a securities filing dated October 28.

In return, regulators agreed to suspend enforcement against the company while the relevant appeals remain pending.

The different responses from operators illustrate the uncertainty facing prediction market companies as they navigate an increasingly complicated regulatory environment.

The dispute is no longer limited to the interpretation of federal financial legislation. It also concerns the extent to which individual states can control gambling-related products offered to their residents through digital platforms.

DeMora argues Ohio is losing substantial tax revenue

Beyond consumer protection and regulatory oversight, DeMora has placed significant emphasis on the financial implications of allowing prediction market operators to operate without the same licensing and taxation requirements imposed on traditional sportsbooks.

The senator argues that companies offering sports event contracts should contribute to state revenues under the same framework as licensed sports betting businesses.

Explaining his position, DeMora said: “We need to regulate them and start taxing them like we're doing with sports betting.”

He has also stressed that the debate concerns the authority of individual states to regulate commercial activities within their jurisdictions, rather than simply being a disagreement over the nature of prediction markets.

“It's an issue of states having the ability to regulate industries in their own state,” he said.

DeMora estimates that Ohio lost hundreds of millions of dollars during the previous two-year budget cycle because prediction market activity was not licensed and taxed under the same system as traditional sports betting.

The figure represents the senator's own estimate rather than an independently verified calculation of lost government revenue.

His argument is that applying the existing sports betting framework to prediction market operators would allow Ohio to generate additional tax income while ensuring that companies offering similar products face comparable regulatory obligations.

Republican Governor Mike DeWine has also described sports prediction contracts as gambling, providing some political support for the broader argument that these products should fall under state gambling oversight.

Nevertheless, DeMora has acknowledged that some members of the state legislature remain unfamiliar with prediction markets and have demonstrated limited interest in the issue.

He believes that greater understanding of the industry's operations and the implications for state gambling policy will be necessary to secure legislative support.

Political changes could influence the 2027 legislative effort

DeMora's plans to revive the legislation come at a time of political transition in Ohio.

Governor Mike DeWine's term ends in January 2027, when a new governor is expected to take office. The change in the state's executive leadership could influence the direction of gambling policy and the level of support for additional regulation.

The Senate's gaming leadership is also expected to undergo changes following Senator Nathan Manning's appointment to the Ninth District Court of Appeals.

Manning's departure is particularly relevant to DeMora's efforts because he has been identified as one of the lawmakers with significant knowledge of gambling policy.

The resulting changes could complicate the process of building support for the proposed legislation, particularly given that neither measure has yet secured substantial progress through the legislative process.

Although the election betting proposal has three additional Democratic co-sponsors, SB 430 currently has DeMora as its sole sponsor.

The senator nevertheless maintains that prediction market regulation should not be treated as a partisan issue. In his view, the central question is whether states should retain the authority to regulate gambling-related commercial activities operating within their borders.

Legislative outlook

Ohio's efforts to regulate prediction markets are unfolding against a wider national debate over the relationship between state gambling laws and federal commodities regulation.

For operators such as Kalshi and other platforms offering event-based contracts, the distinction is fundamental. If their products are treated as federally regulated financial instruments, they could operate under a substantially different framework from traditional sportsbooks. If states successfully classify sports event contracts as gambling, operators could face licensing requirements, taxation obligations and restrictions on the products they offer.

The Sixth Circuit's September ruling has strengthened Ohio's position, but the wider legal dispute remains unresolved, particularly given the conflicting appellate decisions and the possibility of further Supreme Court involvement.

For DeMora, the court decision provides additional grounds to push for legislative action rather than leaving the issue entirely to ongoing litigation.

His two proposals would establish a clearer framework: sports prediction contracts would fall under Ohio's sports gaming regulations, while election-related contracts would be explicitly prohibited.

However, the lack of legislative progress so far means that their eventual adoption remains uncertain.

If the bills do not advance during the current session, DeMora intends to reintroduce them when the new two-year legislative cycle begins in January 2027.

The senator's campaign therefore faces two parallel challenges: translating the favourable aspects of the Sixth Circuit ruling into concrete state legislation and securing sufficient support among lawmakers who may still have limited familiarity with the prediction market industry.

With regulatory enforcement already intensifying and the federal courts continuing to examine the boundaries between financial trading and gambling, Ohio is likely to remain an important battleground in the national debate over the future of sports and political prediction markets.

By fLEXI tEAM