Polymarket Sues Ohio, Calls Sports Betting Law Unconstitutional

^{The constitutionality of Polymarket is being challenged in Ohio under the state's sports betting laws. (Photo: Barry King / Alamy Stock Photo)}

Polymarket is looking to open a new front in the legal battle between state regulators and prediction market platforms, as it has filed a complaint against Ohio officials claiming the state’s online sports betting laws are unconstitutional.

The complaint, filed on Oct. 16 in the U.S. District Court for the Southern District of Ohio Eastern Division, names a variety of regulators at the Ohio Casino Control Commission as well as Ohio Attorney General Andy Wilson as defendants.

Polymarket Cites Commerce Clause in Its Favor

The complaint seeks injunctive relief against Ohio’s threatened enforcement of gaming laws against Polymarket and other prediction markets. Much of the language is similar to that in other legal actions taken by these platforms against state officials, identifying Polymarket as a federally regulated contract market under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC), and saying that the state’s gaming regulations are preempted by the Commodity Exchange Act (CEA).

However, Polymarket also makes specific constitutional claims against Ohio’s laws, saying that they violate the Commerce Clause of the U.S. Constitution.

“It is a felony to operate ‘sports gaming’ in the State without a license issued by the Ohio Casino Control Commission,” the complaint reads. “But the few licenses that are available go only to those with an in-State physical presence. When parceling out those licenses, the Commission is further directed to take into account how much of a ‘physical presence’ the applicant has in Ohio, the duration of the applicant’s in-State presence, as well as the extent of ‘any expenditures for physical infrastructure. Assuming a license were available, Polymarket U.S.’s operations would not just have to be run from Ohio—they would be limited to serving only those physically present in Ohio, cutting the company off from the rest of the United States.”

These arguments aren’t being made in place of the prior arguments brought by Polymarket, Kalshi, and other prediction markets in legal battles across the United States, but represent a second potential way in which the company sees a path towards securing an injunction. Much of Polymarket’s complaint focuses on its argument that Ohio and other states don’t have the ability to regulate event contracts, pointing to the CEA as granting that power only to the CFTC.

Legal Action Imminent Against Prediction Markets

The legal action comes as Ohio Gov. Mike DeWine has said that Andy Wilson will soon file lawsuits against prediction market operators who have yet to remove sports-event contracts in the state after receiving cease-and-desist notices.

“The law is very clear,” DeWine told reporters. “The court decisions have been very clear. The attorney general of Ohio is taking actions he needs to take. These [notices] are not self-executing. You have to actually go out and file these suits, and that’s what we are going to do.”

While cases like these have had different outcomes across the nation – both because state laws and regulations vary, and due to conflicting rulings at the Circuit Court level – this attempt to seek injunctive relief might be challenging for Polymarket. A recent ruling in the Sixth Circuit Court of Appeals found that Ohio could enforce its state gaming laws against Kalshi, suggesting it would also find similarly in the case of Polymarket, new arguments notwithstanding.

While prediction markets and states continue to battle it out in state and federal court, the conflicting rulings make a Supreme Court showdown seem likely. New Jersey has already asked SCOTUS to take up the case it lost in the Third Circuit, though it’s unclear whether the court will choose to hear arguments this fall.

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