Polymarket has sued Ohio's regulator, challenging the constitutionality of the state's licensing requirements for bookmakers. The platform argues that Ohio's rules violate the Commerce Clause by forcing operators to maintain a physical presence and servers within state borders. Polymarket calls this 'unlawful protectionism' that discriminates against interstate commerce.
The argument adds a new dimension to litigation around prediction markets. Where Kalshi and Polymarket previously focused on whether federal commodity regulation preempts state gambling law, the challenge now targets the licensing system itself.
The CFTC has opened two public comment periods running until 18 November: one on banning casino-like products, the other on defining 'swap' with explicit inclusion of event contracts. The regulator's decisions will determine which contracts exchanges can list and where the line sits between financial product and gambling.
Washington State has moved to dismiss Novig's lawsuit, citing federal rulings that sports prediction markets fall under state gambling law. Canada has taken a harder line: the Canadian Investment Regulatory Organization updated its requirements to explicitly prohibit event contracts on sports.
Kalshi requested a month's extension in its Supreme Court procedure. The platform filed petitions for review in the Sixth and Ninth Circuit appellate courts, citing upcoming CFTC rules. Nevada has already objected, arguing that new regulation 'will not change the outcome'.
Polymarket removed the Cornell 7 market from its platform after criticism. Trading volume stood at $451,633 when it closed, with traders pricing the probability of charges at 28%.
