Polymarket sues Ohio over sports event contract cease-and-desist order
The prediction market operator says Ohio's licensing regime unlawfully blocks interstate commerce, weeks after regulators ordered it to stop taking Ohio customers.
Polymarket has filed suit against the state of Ohio, escalating a dispute that began when regulators ordered the platform to stop serving Ohio residents.
The complaint, lodged on 16 October in the District Court of Ohio, names Attorney General Andy Wilson and several members of the Ohio Casino Control Commission as defendants, according to EGR.
Polymarket's core argument is that Ohio's licensing framework amounts to protectionism against out-of-state operators, requiring firms to host servers within the state, restrict wagers to customers physically present in Ohio, and keep a local corporate footprint to hold a licence.
The company contends those conditions breach the Commerce Clause of the US Constitution, which gives Congress authority over trade between states, and argues they are pre-empted by the Commodity Exchange Act because Polymarket US trades as a designated contract market regulated by the Commodity Futures Trading Commission.
In the filing, Polymarket describes its exposure to Ohio enforcement as a threat the Constitution and federal law were designed to rule out, since its activities fall under exclusive federal, rather than state, oversight.
The company also takes aim at Ohio's geofencing requirement, which confines licensed operators to accepting wagers only from bettors inside the state's borders. Polymarket's lawyers call this exactly the sort of border-blocking measure the Supreme Court has previously treated as unlawful protectionism, and say it shuts out-of-state participants from transactions that would otherwise flow freely across state lines.
The cease-and-desist order that prompted the lawsuit was one of several Ohio issued earlier this month to prediction market and exchange-style platforms, including Coinbase, Robinhood, Underdog, ProphetX and Novig. Regulators accused each of offering sports event contracts to Ohio customers without the sports betting licence the state requires.
A tweet from attorney Daniel Wallach, cited by EGR, framed the filing as a direct constitutional challenge to Ohio's betting regime, alleging it discriminates against interstate commerce through its in-state server and physical presence rules.
The Ohio case adds to a widening legal front between prediction market platforms and state regulators. Kalshi has faced action from both Connecticut and New Jersey in recent months over similar questions about whether sports event contracts fall under state gambling law or federal commodities oversight.
New Jersey Attorney General Jennifer Davenport said in September that she expects the matter to ultimately require resolution by the US Supreme Court, a view EGR notes is shared by many in the industry watching the string of state-level disputes unfold.