Ohio Warns Sportsbooks Against Offering Prediction Markets

Sportsbooks will now be facing a difficult decision in Ohio.

The Ohio Casino Control Commission (OCCC) sent out a warning to the state’s online sportsbooks over prediction markets. The regulator’s letter to operators said that their sports betting licenses may be at risk if they launch a sports prediction market in the state. 

“The Commission understands that sports gaming licensees may be considering entering the prediction market landscape. Well-known sportsbooks have apparently explored making sporting event contracts available outside of the ambit of their licensure with the Commission,” the letter from the OCC states.

The move comes one day after Nevada issued a similar warning to its online sportsbooks.

More states are expected to follow the lead of these two states, thanks to several sportsbooks showing interest in offering prediction markets. FanDuel announced it will launch its new prediction market platform later this year, though it won’t include sports. DraftKings is also looking to enter the industry, along with some other smaller rivals.

The OCCC has also filed a lawsuit against Kalshi, the prediction market industry’s most prominent operators.

Prediction Markets are a Gamble for Operators

On its face, sports prediction markets offer a better experience for both bettors and operators. The lack of strict regulations and heavy taxes allows operators to offer better prices than sportsbooks, luring many customers away from the industry. However, any sportsbook considering launching its own platform will have to consider serious risks.

One of the most significant risks for sportsbooks is that the future of prediction markets remains murky. While the White House continues to support the industry, a bipartisan group of state lawmakers has openly opposed the sports prediction market, along with the country’s powerful tribal gaming industry.

Another risk is that sportsbooks will be competing against more experienced operators. That means industry giants like FanDuel and DraftKings may not enjoy the same level of success they have in sports betting. If states revoke their sports betting licenses, it could lead to a significant decline in revenue.