As expected, prediction markets dominated the first full day of conference action at the Global Gaming Expo in Las Vegas. However, unlike the anti-sweeps and anti-DFS movements of the past, the range of remarks around the market from the major operators and American Gaming Association (AGA) run the gamut.
AGA came out strong against the vertical
The trio of keynotes plus opening remarks from AGA CEO and President Bill Miller starkly highlighted how disunited operators are when it comes to this rapidly growing vertical.
It was no surprise that Miller came out starkly against prediction markets, terming them illegal. The AGA has speareaded a number of efforts to combat the proliferation of prediction markets, including opposing the nomination of Brian Quintenz to serve as the Chairman of the Commodity Futures Trading Commission (CFTC) and filing an amicus brief in the New Jersey Third Circuit challenge to Kalshi’s request for an injunction to keep sports contracts online in the state.
“New operators want to access our markets and our customers, but many of them don’t want to play by the rules that made gaming what it is today,” Miller noted.
He also invoked the now-notorious comment of Millbank LLP partner and Kalshi counsel Josh Sterling at a conference earlier this year, in which he suggested that consumer protections were not the concern of the CFTC.
“People are adults, and they’re allowed to spend their money however they want it, and if they lose their shirt, that’s on them,” Sterling stated back in June.
Miller used the comment to highlight some of the attitudes of those in the prediction market space and call it out.
“These operators have a word to describe what it means to ignore the rules, bypass the citizens, offer no community benefits and tell customers it’s okay to lose your shirt,” Miller said. “They call it innovation. I call it something else. It’s greedy, it’s reckless and it’s irresponsible.”
However, Miller’s comments do not illustrate the opinions of many AGA members.
FanDuel already has a partnership with CME Group for event contracts, though the groups have been cagey about how much sports contracts would be part of that deal.
DraftKings ready to be involved in the opportunity presents itself
Meanwhile, Fanatics, DraftKings and others have pending applications with the National Futures Association (NFA) to serve as a Futures Comission Merchant (FCM) which would allow these companies to partner with the likes of Crypto.com or Kalshi.
When Robins took to the stage, he argued that the legality of prediction markets and the scope of just how many contracts firms like Kalshi can offer was not a decision he had the power to make.
“That’s not up to me,” Robins said. “There’s a federal regulator. The CFTC is in charge of deciding what they think is permissible or not. We’re just here to try to understand what the, you know, rules of the road are and participate within them.”
When moderator Hope King asked which sentiment Robins agreed more with, one that suggested gaming operators should embrace prediction markets or that prediction markets should not be offering sports contracts at all, Robins passed on the question. In their chat he did say he felt it was important to keep the pulse of that vertical.
“I think being aware of that shift and understanding it, maybe not every implication and what that means, but being aware that it’s happening and not dismissing it, that’s a really important part for what we do, because we have to understand that the customers of the future are going to be paying attention to different ways.
The closest Robins came to criticizing sports-related prediction markets was on the product front. Robins argued the utility of the vertical was in the part of the country where regulated sportsbooks were unavailable. For him though, the discrepancy in the quality of the product was still too vast for prediction markets to be more than a small revenue contributor.
MGM worried about federal government in gaming
Robins was largely welcoming to the industry with only a sheen of trepidation, whereas MGM Resorts CEO Bill Hornbuckle’s approach to the issue was more one of hesitancy and trepidation with a small window open to the notion the company will get involved in the event contract space.
Hornbuckle, like others in brick and mortar space, expressed concern at the kind of precedent that could be set federally and how it could impact not just sports betting but other gambling verticals that have historically been the subject of state-level regulation.
“It’s something that we all need to keep a very close watch on, really understand what’s going on,” Hornbuckle suggested. While the company has no plans to be proactive about the space, he did admit that, if there was regulatory clarity around the vertical, participation would be a given.
“Would we be a fast follower if, for some reason, [prediction markets] were to break through? Absolutely.”
In the interim though, the company, which has brick and mortar casinos regulated at the state level throughout the country and in markets like Michigan, where regulators have cautioned to steer cleer of event contracts, has to keep the bigger picture in mind.
“It does invite the notion that the federal government can step into our space. That is something this industry has historically and categorically defended against,” he added.
BetMGM in ‘lockstep’ with MGM’s position
Speaking to SBC Americas, BetMGM CRO Matt Prevost confirmed that the joint venture between MGM Resorts and Entain holds the same views as Hornbuckle and they are in “lockstep” with Hornbuckle on the issue.
“We will be guided by our regulatory partners, and we have no intention of launching into a world that’s opaque or vague. We want to have absolute clarity before we were to launch into that market, into anything. We’re regulated gaming, period,” Prevost said.
