Key Takeaways
Contents
- State Senator Bill DeMora introduced SB 430 targeting prediction markets that offer sports-related contracts
- Proposed legislation would mandate licensing and tax compliance matching current sportsbook requirements
- Multiple federal appeals courts have reached different conclusions about state authority over prediction market platforms
- Ohio’s regulatory body has initiated proceedings to levy a $5 million penalty against Kalshi for unauthorized operations
- Additional gambling legislation pending in Ohio includes measures ranging from enhanced taxation to complete online betting prohibition
A Democratic lawmaker in Ohio has introduced legislation on Monday designed to bring prediction market platforms under the same regulatory framework as traditional sports betting operators when they facilitate wagers on athletic competitions.
Senator Bill DeMora from Columbus submitted Senate Bill 430 as a contingency measure. Should the nation’s highest court rule favorably for prediction market companies in current litigation, his proposed law would establish state authority to impose taxes and oversight.
“If somehow we lose the court cases, and they say, well, they can do this, then they ought to be taxed for it,” DeMora told Gambling Insider.
As the ranking Democratic member on Ohio’s Senate Select Committee on Gaming, DeMora characterized Kalshi—the nation’s dominant prediction market platform—as illegitimate, asserting that contracts on sporting outcomes function identically to conventional sports wagers.
“They need to be regulated like everybody else,” he said. “They need to pay the same amount of taxes everybody else is paying.”
Conflicting Federal Appellate Decisions Create Legal Uncertainty
Ohio joins multiple jurisdictions pursuing legal action against Kalshi for purported violations of state gaming statutes. The company and similar operators contend that exclusive regulatory jurisdiction belongs to the U.S. Commodity Futures Trading Commission.
The CFTC has independently initiated litigation against specific states attempting to restrict prediction market operations within their borders.
Two weeks prior, the Ohio Casino Control Commission revealed intentions to impose a $5 million penalty on the New York-headquartered company for facilitating sports wagering without proper authorization.
Last Friday, a three-judge appellate panel from the U.S. Sixth Circuit Court of Appeals rejected Kalshi’s motion for preliminary injunctive relief against Ohio regulators. The court simultaneously expedited the appeal timeline, establishing a May 5 deadline for Kalshi’s brief and June 4 for Ohio’s response.
That same Monday, the identical court granted Kalshi’s petition to review Tennessee’s challenge to a district court decision that prevented the state from enforcing regulations against the platform.
Earlier in the month, judges from the U.S. Third Circuit Court of Appeals issued a divided opinion favoring Kalshi in its dispute with New Jersey authorities.
The contradictory decisions emerging from various federal circuits increase the probability of eventual Supreme Court intervention.
Additional Gaming Legislation Under Consideration
DeMora expressed skepticism about congressional action on prediction markets, citing political polarization and the approaching election cycle. He advocated for independent state-level initiatives.
Fundamental operational distinctions separate traditional sportsbooks from prediction markets. Conventional betting platforms accept wagers directly, whereas prediction markets facilitate peer-to-peer contract matching. Age restrictions also differ—prediction markets permit 18-year-old participants, while Ohio mandates 21 as the minimum age for sports betting.
Licensed sportsbook operators in Ohio generated over $1 billion in revenue during the previous year. The state applies a 20% tax rate on that revenue, collecting nearly $210 million in 2025, with the majority allocated to educational funding.
DeMora’s proposal represents one among multiple gaming-related measures under legislative consideration. Republican House members recently introduced the “Save Ohio Sports Act,” legislation that would eliminate online sports betting entirely and confine wagering activities to the state’s quartet of casino facilities.
Republican Senator Louis Blessing has separately introduced legislation adding a 2% levy on the total betting handle processed by sportsbooks, supplementing the current 20% revenue tax.
The Ohio Legislature has scheduled sessions for mid-May and consecutive weeks throughout June, with additional meetings anticipated following the November election. Kalshi has not yet provided comment regarding SB 430.
