Polymarket US sues Ohio regulators over sports licensing rules, citing Commerce Clause

QCX LLC, trading as Polymarket US, filed a federal complaint against Ohio officials on 16 October 2026. The company alleges that the state's sports betting licensing regime violates the Commerce Clause, and says the Commodity Exchange Act preempts it.

Operators and affiliates working with prediction markets in the US could face overlapping state litigation, CFTC rulemaking and Kalshi's court filings.

What happened

The complaint was filed in the federal trial court for the Southern District of Ohio (case 2:26-cv-01502) against Ohio Attorney General Andy Wilson and the members of the Ohio Casino Control Commission, all in their official capacities. Polymarket US seeks declaratory and injunctive relief.

According to the complaint, Ohio law makes it a felony to operate sports gaming without a Commission licence, while the available licences go only to applicants with an in-state physical presence. It says the Commission must take into account an applicant's in-state presence and its spending on physical infrastructure, and that a licensee's operations would be limited to people physically in Ohio. Polymarket US argues that Ohio is discriminating against interstate commerce.

The complaint says the Commission sent a letter on 2 October 2026 demanding that Polymarket US stop offering sports-event contracts to people in Ohio without a licence and confirm compliance in writing within 14 days. It adds that the letter warned of administrative, civil, nuisance or criminal action.

The filing also relies on two CFTC proposals. According to the complaint, one defines "swap" to include event contracts. The other, an interim final rule, excludes casino-style gambling products from the definition of swaps. Polymarket US argues these proposals remove doubt about CFTC jurisdiction, and notes that the Sixth Circuit's decision in KalshiEX LLC v. Schuler of 25 September 2026 remains subject to rehearing.

Other developments reported by Gambling Insider:

• Kalshi has also filed rehearing petitions with the Sixth and Ninth Circuits, citing the forthcoming CFTC rules.

Washington State's motion to dismiss Novig's lawsuit was filed on 19 October. The state argues that the Ninth Circuit's 28 August 2026 decision in KalshiEX v. Assad is binding and that the Commodity Exchange Act does not preempt state gambling law for sports event contracts.

Why it matters

Operators and affiliates promoting or partnering with sports event contracts in Ohio, Washington or other states should check their legal exposure state by state, because courts are not aligned. The Sixth Circuit's Schuler ruling is cited by Polymarket US as favouring exclusive CFTC jurisdiction, while Washington points to the Ninth Circuit's Assad decision and what it calls the weight of authority for state enforcement.

If it succeeded, it could affect in-state presence and server requirements that traditional licensees in Ohio must meet. That could matter for licensing strategy and competition, although the outcome is uncertain.

The CFTC proposals could influence which contracts exchanges may list and how the agency separates financial products from gambling. Sportsbook-adjacent operators should check whether their products could fall on either side of that line.

What's next

Watch for rulings on Washington's motion to dismiss Novig's case, as well as on Kalshi's rehearing petitions.