Polymarket Challenges Ohio Licensing Rules in Federal Suit Alleging Commerce Clause Violations

Polymarket US has filed a federal lawsuit contesting Ohio’s application of sports betting laws to prediction market platforms. The complaint asserts that the state’s licensing framework conflicts with interstate commerce protections and federal commodities authority under the Commodity Exchange Act.

The complaint, filed on October 16, names Ohio Attorney General Andy Wilson and Ohio Casino Control Commission Executive Director Andromeda Morrison as defendants. It seeks injunctions to prevent enforcement actions. The move follows cease-and-desist notices delivered on October 2 to Polymarket plus nine other entities including Robinhood, Coinbase, Underdog, Novig, Prophet X, Gemini Titan, Plus500, Moomoo and Webull. As reported by World Casino News, regulators ordered the businesses to stop offering or facilitating sports event contracts for Ohio residents by October 16.

Polymarket’s Arguments on Preemption and Discrimination

The suit centers on Ohio rules that require sportsbooks to maintain in-state servers and limit services to customers physically present in the state. Polymarket claims these mandates discriminate against out-of-state businesses and therefore breach the Constitution’s Commerce Clause. The company states that its nationwide exchange cannot comply without disrupting interstate operations.

“Ohio’s threatened enforcement through its protectionist licensing regime violates the U.S. Constitution’s Commerce Clause and is preempted by the Commodity Exchange Act (CEA),” the complaint reads. It adds that the CFTC maintains exclusive jurisdiction over the event contracts at issue.

The Open Question for State and Federal Overlap

This challenge arrives after the US Court of Appeals for the Sixth Circuit ruled against Kalshi on September 25. That decision held the contracts were not swaps under the CEA and did not preempt Ohio or Tennessee sports betting statutes. Gaming attorney Joshua Kirschner questioned the protectionist characterization. “This argument that the OCCC’s regime is merely for protectionist purposes and therefore illegal on its own seems to miss the point on a few counts,” Kirschner said.

Ohio Governor Mike DeWine affirmed the state’s intent to file suits where needed. “The law is very clear. The court decisions have been very clear. The attorney general of Ohio is taking actions he needs to take. These are not self-executing. You have to actually go out and file these suits, and that’s what we are going to do,” DeWine said. Polymarket is represented by Gibson, Dunn & Crutcher, which aided New Jersey in the 2018 PASPA reversal.

The litigation exposes a concrete risk that conflicting federal and state regimes will produce repeated challenges. Operators must prepare for prolonged uncertainty in states that treat event contracts as gaming while federal registration applies. Resolution in this forum could establish whether physical-presence rules survive scrutiny when commodities law is invoked.

Reporting: World Casino News

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