Ohio bill would license and tax sports prediction markets

Ohio lawmakers introduced legislation in the General Assembly that would require platforms selling tradable contracts tied to sports outcomes to obtain a state license and pay taxes to Ohio. The bill targets online services that let users buy, sell or trade contracts that resolve based on game results, player statistics or specific plays.

Under the proposal, operators would need a license before offering contracts to Ohio residents and would be required to remit prediction market taxes on receipts or winnings as defined by Ohio tax law. The measure would apply to companies based in Ohio and to out-of-state platforms that accept Ohio customers.

Sports prediction markets allow participants to buy contracts that pay out if a named event occurs. Many platforms permit secondary trading so prices reflect perceived likelihoods. Some use traditional payment systems while others use cryptocurrencies or tokenized assets.

Supporters say licensing would create clearer rules for taxation and require operators to register, report activity to regulators, and follow anti-fraud and anti-money-laundering checks. Backers contend tax remittance would align revenue from these markets with other taxed gaming or wagering activity in the state.

Industry groups and digital-platform advocates have raised concerns about compliance costs and the difficulty of enforcing state rules on internet-based services. Enforcement options referenced in the bill include blocking access, imposing fines, or pursuing legal action against operators that fail to obtain a license or pay required taxes.

Federal law governs certain aspects of online wagering and financial trading, while states regulate gambling, taxation and business licensing. Several states have recently revised laws to address online sports betting and daily fantasy sports; the Ohio proposal would extend state regulation to market-style sports contracts.

If enacted, the legislation would direct Ohio regulators to develop licensing standards, enforcement procedures and a compliance timeline for operators offering sports contracts to Ohio residents.