MGM and Caesars reject prediction markets over licence risk
Two of America’s biggest casino operators have ruled out entering prediction markets, with MGM Resorts CEO Bill Hornbuckle saying the potential threat to the company’s gambling licences simply isn’t worth the risk.
Hornbuckle and Caesars Entertainment CEO Tom Reeg used this week’s Global Gaming Expo in Las Vegas to draw a clear line between their businesses and companies offering sports-related prediction contracts.
“Prediction markets are hurting the industry, full stop,” Hornbuckle said.
The comments come as prediction markets increasingly collide with America’s state-regulated sports-betting system.
Companies including Kalshi argue that sports event contracts are financial products regulated federally by the Commodity Futures Trading Commission rather than gambling products requiring individual state sportsbook licences.
State gambling regulators strongly disagree.
Hornbuckle said MGM had considered entering the sector before Nevada regulators made the potential consequences clear.
According to Hornbuckle, Nevada authorities had “absolutely” indicated that involvement could affect the company’s gaming licences.
That creates a much bigger problem for a casino operator such as MGM than simply losing access to Nevada.
Casino regulators routinely examine an operator’s conduct in other jurisdictions when determining its suitability, meaning a regulatory dispute in one state can potentially have consequences elsewhere.
MGM is also investing billions of dollars in its future Japanese casino resort in Osaka and operates extensively in Macau.
“If they want to come in Nevada and pay a licence, and do what we all do, God bless them,” Hornbuckle said of prediction-market operators.
Reeg expressed similar concerns.
The Caesars chief compared the rapid development of prediction markets with the early daily fantasy sports industry, when products expanded faster than state regulators could determine exactly how they should be treated.
His concern is that a major failure in a lightly regulated market could damage confidence in the broader legal US gambling industry, with this position creating an increasingly interesting divide.
Traditional casino giants including MGM Resorts and Caesars Entertainment are staying away.
Sports betting companies and other technology businesses, meanwhile, increasingly see prediction markets as a route to customers in states where conventional sports betting is unavailable or heavily restricted.
The legal position is far from settled.
Prediction-market operators argue federal commodities law pre-empts state gambling restrictions, while multiple states maintain that contracts based on sporting results are simply another form of sports betting.
Recent federal court decisions have added to that uncertainty rather than resolving it nationally.
For MGM and Caesars, however, the calculation appears considerably simpler.
Whatever commercial opportunity prediction markets may provide, neither company currently believes it is worth putting its existing casino licences at risk.
