Is ProphetX legal in Ohio?

The letter is dated October 2, 2026, carries the subject line "Cease and Desist from Offering Sports Event Contracts in Ohio," and says it was "Sent Via Certified Mail and Email" (p.1). Its salutation is "Dear Prophet X," and the name ProphetX LLC appears nowhere in it.

It lists two mailing addresses for Prophet X: one in care of Corporation Service Company at 1160 Dublin Road in Columbus, and one at the World Trade Center, 29th Floor, 150 Greenwich Street in New York, plus an email address at prophetexchange.com (p.1). ProphetX LLC's Form DCM, its application to the CFTC, gives "4 World Trade Center, 150 Greenwich Street, New York NY 10007" as its principal executive offices. The street address matches; the letter itself does not name an entity.

The third page carries the name block of the Commission's interim executive director, with no signature image in the copy we read. The Commission's website returned an error page when we checked on November 3, so the links go to our copy and to the third-party copy, where it is pages 10 to 12 of a 28-page bundle.

The operative sentence demands "that Prophet X cease and desist from offering, participating in offering, or facilitating those who offer sports event contracts in Ohio" (p.2). The letter spells out two activities it includes:

• soliciting or accepting orders for sports event contracts listed on any designated contract market from persons located in Ohio, and
• operating a futures commission merchant or designated contract market that offers sports event contracts to persons located in Ohio.

The second describes the kind of business the CFTC designated ProphetX LLC to run. The letter then says Prophet X "shall notify the Commission in writing no later than fourteen (14) days following the date of this letter that it has complied" (p.2). It gives no calendar date; counted by us from October 2, fourteen days ran to October 16, 2026. Nothing in the letter addresses contracts on elections, economics or any other subject outside sports.

Everything in this section is the Commission's position as the letter states it. No court has made these findings about ProphetX in any record we found.

• Jurisdiction. It claims authority over everyone conducting or participating in sports gaming in Ohio, citing R.C. 3775.02(A) (p.1).
• The product. Working "Based on Prophet X's online content," it describes contracts "corresponding to one of two outcomes of an event," such as a team winning or a player meeting a statistic, and concludes: "Plainly stated, Prophet X is operating online sports gaming" (p.1).
• The license. Ohio requires a Commission license to offer sports gaming (R.C. 3775.03(A)). The letter cites R.C. 3775.01(O)(1) for offering as accepting wagers on sporting events, and R.C. 3775.01(N)(1) for sporting events including athletes' individual statistics.
• The criminal code. It quotes R.C. 2915.01(B), under which a bet is "the hazarding of anything of value upon the result of an event, undertaking, or contingency, but does not include a bona fide business risk," and says Prophet X "is clearly engaged in bookmaking or facilitating bookmaking" (p.2).

The letter cites these consequences. We found none of them pursued against ProphetX:

• treating sports gaming run outside Chapter 3775 as a felony under R.C. 3775.99(B)(9);
• abating Prophet X's online content, its website included, as a nuisance under R.C. Chapter 3767;
• a civil penalty or fine that, it says, can equal what Prophet X "unlawfully obtained or retained" from these contracts with people in Ohio, citing R.C. 3775.02(H)(1)(a), R.C. 3772.04(B) and Ohio Adm. Code 3775-1-08 (p.2).

It adds that remedies may reach Prophet X's "officers, directors, and holding or parent companies," and warns that failure to comply may lead to "administrative, civil, nuisance, or criminal actions" (p.2).

The letter's legal anchor is a case ProphetX was not in. In the Commission's words, the Sixth Circuit on September 25, 2026 "held that the Commodity Exchange Act neither applies to these sports event contracts nor preempts Ohio's sports gaming law," a decision the letter says "makes clear that Ohio's sports gaming laws apply to Prophet X's sports event contracts" (p.2).

The opinion in KalshiEX v. Schuler (Nos. 26-3196 and 26-5235) frames its holdings in two steps: Kalshi "has not shown that its sports-event contracts satisfy the statutory definition of a 'swap'," and, assuming they were swaps, federal commodities law "neither expressly nor impliedly preempts Ohio's or Tennessee's gambling laws" (p.3). The court was reviewing preliminary injunctions; it affirmed the Ohio federal court's denial, vacated the Tennessee court's grant and remanded (p.49). ProphetX's name does not appear in its 49 pages.

Kalshi asked the full court to rehear the case in a petition filed October 9, 2026. We did not read the docket for this page and cannot say whether the court has acted. Kalshi in Ohio tracks that case.

As of November 3, 2026, we found no Commission step naming Prophet X or ProphetX LLC after October 16: no fine notice, no hearing, no administrative order and no lawsuit in either direction. We also found no public reply from ProphetX.

We did not search federal court indexes for this check, and the Commission's own site did not load. A filing or notice could exist that we have not seen, so "we found none" is as far as this page goes.

The CFTC designated ProphetX LLC, "a Delaware limited liability company headquartered in New York," a contract market by an Order of Designation dated June 11, 2026 (p.1). The order approves the application "subject to the following terms and conditions," one of which is that ProphetX "may not permit any futures commission merchant to intermediate any transactions" unless the order is amended (p.3). ProphetX told the CFTC its trading model "is non-intermediated" (p.2).

A designation is the federal regulator's approval to run an exchange. It does not decide whether Ohio's gaming law reaches that exchange's sports contracts, and we found no filing or public statement in which ProphetX takes a position on Ohio's law.

No Ohio court order we found blocks it. We could not determine whether ProphetX has restricted anything for people in Ohio, and we found no ProphetX statement on Ohio availability before or after the letter.

The demand is addressed to the company. It does not mention money already deposited, withdrawals, positions that are open, or contracts outside sports. Every state where ProphetX faces an action is on ProphetX's legal page.

One other state appears in ProphetX's record. Connecticut's governor's office announced on September 10, 2026 that the state's Department of Consumer Protection had issued cease-and-desist orders to nine prediction markets and listed ProphetX among them; we have not seen that order or which company it names.

In Ohio, the 28-page bundle that holds this letter also holds same-day letters to Underdog's two companies, Gemini Titan, Coinbase, Novig, Polymarket US's PM US Tech, Plus500US, Moomoo and Webull, and one to a lawyer for Robinhood Derivatives. Gemini in Ohio and Novig in Ohio follow two of them.

The Commission's letter decides who needs an Ohio sports gaming license, and a state licensing action is not a ruling on federal income tax. The prediction market tax guide covers how an event contracts year comes out under each of the common ways people file, since the IRS has issued no guidance on event contracts.