The Current: Inside The Kalshi Cease-And-Desist Letter In Ohio

TCL has seen the full letters Ohio's gaming regulator has sent to Kalshi, Robinhood and Crypto.com. Here are the laws the state says they are breaking, and what could happen if they don’t comply.

Apr 01, 2025

Quick note: I will be in San Diego at the Indian Gaming Tradeshow & Convention this week; reach out if you want to say hi or have a chat.

The Ohio Casino Control Commission outlined in detail which laws it believes Kalshi, Robinhood and Crypto.com are violating in cease-and-desist letters obtained by The Closing Line.

The OCCC announced its action via a press release on Monday. Here’s a look inside the letters, which are all similarly constructed, but I’ll refer mostly to the Kalshi letter for simplicity.

“Plainly stated, Kalshi is operating online sports gaming,” the letter states, signed by Executive Director Matthew Schuler. The letters are dated March 31. Kalshi contends that its offering is legal in all 50 states because it is federally regulated by the Commodity Futures Trading Commission.

Here are some of the rules and statutes Ohio cites and claims Kalshi and the others are violating. The following bullet points are all language directly from the letter:

Sports gaming cannot be offered in Ohio without a license issued by the Commission. R.C. 3775.03(A).
A person or business offers sports gaming when it accepts wagers on sporting events. R.C. 3775.01(O)(1).
Sporting events include, but are not limited to, professional and collegiate athletic events. R.C. 3775.01(N)(1).
Further, the Ohio General Assembly defined wager as “to risk a sum of money or thing of value on an uncertain occurrence.” R.C. 3775.01(DD). Therefore, a person or entity that accepts anything of value risked on the outcome of a sporting event without a valid license issued by the Commission is violating Ohio sports gaming laws.
It is a felony to offer sports gaming in the State in a manner that does not comply with Chapter 3775 of the Ohio Revised Code. R.C. 3775.99(B)(9). Further, an unlicensed sportsbook operating within Ohio is also facilitating bookmaking in violation of the Ohio Criminal Code. See R.C. Chapter 2915.
Bookmaking is defined under Ohio law as “the business of receiving or paying off bets.” R.C. 2915.01(A).
The Code specifically defines “bet” as “the hazarding of anything of value upon the result of an event, undertaking, or contingency, but does not include a bona fide business risk.” R.C. 2915.01(B).
Kalshi’s current March Madness and other sporting event offerings are clearly facilitating bookmaking in violation of Ohio civil and criminal law, exposing Kalshi to civil and criminal penalties. R.C. 2915.02, R.C. 3775.02, R.C. 3775.99.

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Also of note:

The letter asserts that “Kalshi’s website constitutes a nuisance under Ohio law that is subject to abatement under R.C. Chapter 3767. R.C. 3775.99(B)(9).” Schuler goes on to note that the OCCC could impose civil penalties or fines “equal to the money or value of the property that Kalshi has unlawfully obtained or retained by offering these event contracts on sporting events to the citizens of Ohio.”
The OCCC also takes issue with the fact that you only need to be 18 to trade on Kalshi, calling it “a flagrant disregard of Ohio’s statutory gambling age limit” of 21.
For Kalshi specifically, the OCCC notes that in some ways “Kalshi is trying to act like a regulated, licensed sportsbook”:
- “Recently, Kalshi announced that it was partnering with IC360, a prominent firm specializing in comprehensive monitoring and compliance solutions for sports and sports betting. Kalshi simultaneously heralded the ‘Consumer Protection Hub,’ which will feature voluntary opt-outs and other self-exclusion tools. Notably, Kalshi’s attempt at offering an exclusion tool highlights that those Ohioans that have signed up for broad exclusion from all sports gaming through the TimeOut Ohio Program would still have unrestricted access to Kalshi’s offerings.”
- The letter closes by saying that “criminal sanctions” could be considered if Kalshi (and the others) do not comply with the April 14 deadline to cease and desist.

One final note from the Robinhood version of the letter; it’s clear that the OCCC, at least, doesn’t currently care about markets other than sports event contracts:

The Commission is also aware Robinhood has other event contracts offered by ForecastEX. See https://cdn.robinhood.com/assets/robinhood/legal/Event_Contracts_Risk_Disclosure.pdf. However, the Commission is concerned with event contracts on sporting events and, at the time this letter was sent, event contracts on sporting events were not listed on ForecastEx’s website.

Kalshi vs. NJ update

The New Jersey attorney general responded this afternoon in the lawsuit Kalshi filed in federal court last week; the case is about the legality of sports event trading in the state. The TL;DR version: New Jersey is extending the deadline for compliance by Kalshi to its cease-and-desist to April 30. That means a temporary restraining order will not be needed, allowing for the court to decide on the merits of a preliminary injunction by the new deadline (ie whether Kalshi needs to exit the state while the case is heard).

The relevant bit of the letter:

As Kalshi acknowledged in its application for a TRO, DGE initially extended the deadline for Kalshi to comply with its March 27, 2025 Cease & Desist letter to April 7, 2025. (ECF 2 at 4). Since that time, DGE has further extended the deadline for compliance until April 30, 2025. Because the status quo remains in place until at least April 30, 2025, the parties agree there is no need for the Court to consider the TRO application at this time. Therefore, the parties respectfully request an adjournment of the TRO hearing currently scheduled for Wednesday, April 2, 2025.

With respect to Kalshi's motion for a preliminary injunction, the parties propose the following briefing schedule:

* Defendants' opposition brief: April 18, 2025;

* Plaintiff's reply brief: April 23, 2025.

The parties believe that this schedule will allow the Court to resolve Plaintiff's preliminary injunction motion by DGE's new April 30 deadline.

Finally, some prediction markets coverage today from The Event Horizon:

Event Horizon

Robinhood Is Trying To Be A Bank And A Sportsbook, And Why That's A Terrible Idea

Should I even have to write that headline? Is there anyone who legitimately thinks that a bank should be a sportsbook, too…

3 months ago · Dustin Gouker

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Gambling news today

DraftKings, FanDuel Make Nice With Indian Country, But California Legalization Scenario Remains Elusive (Casino Reports): “Two of the biggest names in online sports betting sat in front of a packed room at the Indian Gaming Association conference Monday and said all the right things. DraftKings co-founder Jason Robins and FanDuel President Christian Genetski admitted to past mistakes and continued the mea culpa tour Genetski began just over a year ago.
Asked if commercial operators would again try for a ballot initiative in California, Genetski said it is ‘safe to say’ they won’t.”
- While some had hoped online sports betting could happen sooner rather than later in California, we are still measuring the time to legalization in (likely many) years, plural.
Mississippi Online Sports Betting Hope Dies Quiet Death (Sports Betting Dime): “Mississippi online sports betting ended up in exactly the same spot this legislative session as it did in 2024. Dead and buried in a conference committee. A conference committee of Mississippi legislators could not come to a consensus on a Senate-approved bill to prohibit sweepstakes gaming that included tacked-on online sports betting language.”
- The sweepstakes industry has dodged one bullet this legislative season, but several more bills to ban the industry are still in play.
- Mississippi already has retail sports betting, but a move to authorize online sportsbooks remains a bridge too far.
Stake hit with lawsuit over operation of social casino and sweepstakes (SBC Americas): “According to court documents, Dennis Boyle is suing Sweepsteakes Limited alleging the company of operating an illegal gambling website, Stake.us. Boyle filed the suit as a California resident and former gambling addict who has lost money with Stake. The suit was remanded, moving the case from state court up to federal court. The suit was originally filed on Feb. 14.”
Sportradar Outlines Growth Strategy and Financial Outlook at Investor Day (release): “Sportradar Group AG (NASDAQ: SRAD), the leading global sports technology company, will today host an Investor Day to present the Company’s growth strategy and financial outlook. Chief Executive Officer, Carsten Koerl, Chief Financial Officer, Craig Felenstein, and other members of the Sportradar leadership team will provide an in-depth look into the Company’s priorities and growth opportunities. The event will also feature a fire-side chat with Adam Silver, NBA Commissioner and Gary Bettman, NHL Commissioner, as well as presentations from Jason Robins, Co-Founder and CEO of DraftKings and George Daskalakis, Co-Founder and CEO of Kaizen Gaming, owner of the Betano sportsbook brand.”
Regulated Gaming and Daily Fantasy Now Available for DGPT Events (Disc Golf Pro Tour): “Starting this coming weekend at the MVP Music City Open, disc golf fans will have the opportunity to engage in various gaming opportunities, including Daily Fantasy Sports (DFS) and regulated sports wagering. Fans can visit nxtbets.com/playdgpt to view available gaming opportunities in their location and learn more about how to play DFS & Legal Sports Betting on DGPT events. Regulatory approval at the state level is required to offer gaming in each jurisdiction, and additional states will be added as approvals are secured.”
- I am a recreational disc golf player and I want to be on record saying I don’t need to be able to bet (or play real-money fantasy) on the sport. But god bless if you if that’s something you want to do.
- I had to triple check to make sure this wasn’t April Fools.
Golden Nugget CEO to step down if confirmed as US ambassador (SBC Americas): “Golden Nugget owner Tilman Fertitta is planning to step down from his role as CEO of the company if he is confirmed as the new U.S. Ambassador to Italy and San Marino. According to an ABC13 report, Fertitta has notified the U.S. Department of State of his intention to relinquish his role as CEO of Fertitta Entertainment, the owner of Golden Nugget Casinos, if he successfully completes a Senate confirmation set for April 1.”
Arizona Sports Betting Regulator Issues PSA On Imitation Casinos (Legal Sports Report): “The Arizona Department of Gaming issued a Consumer Protection Alert Monday, informing the public about a nationwide trend of fraudulent online operators. According to the release, the operators present themselves as legitimate platforms connected to licensed Arizona casinos.”
Losing bet? Downtown Hartford sports-betting lounge on track to lose money for second year running (Hartford Business Journal): “A sports-betting lounge that opened inside Hartford’s XL Center arena in 2023 is on track to lose more than $200,000 by the close of the fiscal year. This is prompting the Capital Region Development Authority to contemplate cost-saving measures that include a reduced schedule.”