Polymarket US Sues Ohio, Calling Its Sports Betting Licence Rules 'Unlawful Protectionism'
Polymarket's US exchange has sued Ohio's attorney general and casino regulators in federal court, arguing that the state's online sports betting licence rules discriminate against out-of-state businesses and cannot be enforced against an exchange regulated by the CFTC.
- QCX LLC, trading as Polymarket US, filed the complaint on 16 October in the US District Court for the Southern District of Ohio, the day a 14-day cease-and-desist deadline from the Ohio Casino Control Commission ran out.
- Its first claim says Ohio's in-state office and in-state server requirements breach the Commerce Clause of the US Constitution; the second says federal commodities law pre-empts Ohio's gambling laws.
- Ohio's regulator sent the same cease-and-desist letter to 10 prediction markets and brokers on 2 October, and most were still offering sports contracts when the deadline passed.
The case, No. 2:26-cv-01502, names Attorney General Andy Wilson, Interim Executive Director Andromeda Morrison and the seven members of the Ohio Casino Control Commission in their official capacities, and has been assigned to Judge Douglas R. Cole, RG reported. Gaming lawyer Daniel Wallach drew wider attention to the filing on 20 October.
It is the first time Polymarket has attacked a state's licensing system itself rather than relying only on the argument that federal law pushes state gambling rules aside. If the claim succeeds, it would question whether Ohio's rules for entering the market can stand in their current form at all.
The Cease-and-Desist Letters
The commission wrote to Polymarket US and nine other prediction markets and brokers on 2 October. According to the complaint, the letter told the company to "immediately cease and desist" from offering sports event contracts in Ohio without a licence and to confirm compliance in writing within 14 days. It warned of administrative, civil, nuisance or criminal action and threatened a civil penalty equal to the money the company had made from offering the contracts in the state.
Polymarket US says that leaves it with two bad choices: keep operating and risk enforcement, or cut off Ohio users and unwind their open positions. Either route, it argues, would cause harm that money damages could not repair.
'Unlawful Protectionism'
The first count targets the structure of Ohio's sports betting law. Type A online sports gaming licences go only to applicants with at least one operational place of business in Ohio or a sports gaming facility there, and the commission must weigh an applicant's physical presence, its history in the state and its contribution to the local economy. The number of such licence holders is capped at 25 unless the commission decides the market needs more.
National brands such as FanDuel, DraftKings, BetMGM, Caesars, bet365 and Fanatics reach Ohio bettors only as management services providers working under contract with those licence holders, the complaint says. Ohio also requires the servers that accept wagers to sit in a secure facility inside the state.
"These discriminatory, balkanizing measures violate the Constitution's promise of open, interstate commerce," the complaint says. Polymarket US adds that it does not hold an Ohio licence and could not obtain one if it applied.
The Pre-emption Argument
The second count says the Commodity Exchange Act pre-empts Ohio's laws as applied to the exchange. Polymarket US says the CFTC designated it as a contract market on 9 July 2025, and that Congress gave the agency exclusive jurisdiction over swaps traded on such markets.
The filing leans on the CFTC's 9 October interim final rule and a companion proposal that would expressly list sports, politics, culture and weather event contracts as swaps. The interim rule took effect on 19 October, and comments on both documents are due by 18 November.
It also takes on the Sixth Circuit Court of Appeals, which ruled against Kalshi on 25 September in a decision Ohio cited in its letters. Polymarket US says that case was decided "against a different legal landscape", before the CFTC acted, and points out that the ruling is still open to rehearing and Supreme Court review. Kalshi has already asked both the Sixth and Ninth Circuits to rehear their rulings in light of the new CFTC rules.
The company wants the court to declare Ohio's gambling, nuisance and sports gaming laws unconstitutional and pre-empted as applied to it, and to grant preliminary and permanent injunctions blocking enforcement. It is represented by Squire Patton Boggs and Gibson, Dunn & Crutcher.
Ohio Is Not Backing Down
Most of the 10 platforms that received letters were still offering sports markets when the deadline passed, the Ohio Capital Journal reported, although the commission said Plus500US had agreed to stop. "They need to come into compliance, or we're gonna force them into compliance," Wilson told the outlet. Governor Mike DeWine called the products "pure and simple gambling".
Ohio is not alone in going on the offensive. Days after the filing, Utah sued Kalshi and two Susquehanna trading firms in state court, seeking up to $61.2 million in fees. For Polymarket's US app, which has nearly tripled its weekly volume since early September, a ruling in Columbus will decide whether one of the largest regulated sports betting states in the country stays open to it.
