MGM CEO Supports Nevada’s Strict Approach on Prediction Markets
Introduction to the Debate on Prediction Markets
There is a growing divide within the American gambling industry regarding how prediction markets should be regulated. Bill Hornbuckle, CEO of MGM Resorts International, recently emphasized that these markets should be regulated in the same way as traditional sports betting.
Hornbuckle Applauds Nevada Regulators for Their Position
Hornbuckle expressed his approval during a meeting with the Nevada Gaming Commission. He praised state officials for adopting a firm stance against companies attempting to expand sports-event trading platforms without consistent regulation.
According to Hornbuckle, the recent regulatory guidelines from Nevada provide much-needed clarity for licensed gaming companies operating in the state. He believes that these new trading offerings, sometimes presented as financial instruments by technology-focused firms, essentially represent sports betting. Therefore, he argues they should fall under the same regulatory and tax frameworks that govern sportsbooks across Nevada and other states.
Industry Conflict Increases with FanDuel and DraftKings Exiting Nevada
Hornbuckle’s comments followed a turbulent period during which FanDuel surrendered its Nevada gaming license, and DraftKings ceased efforts to obtain one. Both companies have expressed intentions to launch prediction platforms enabling users to buy and sell outcomes for sports events and other real-world results. Their departure from the American Gaming Association highlighted a significant rift between traditional casino operators and digitally focused gambling companies.
Nevada Regulators Issue Warnings on Event-Contract Trading
Nevada’s gaming authorities have warned that involvement in prediction markets, even those conducted outside state lines, could jeopardize a company’s gaming license. They emphasized that offering contracts related to sports outcomes qualifies as betting under state law, regardless of oversight by the federal Commodity Futures Trading Commission. This position is particularly critical for companies operating large casino resorts, for whom maintaining a gaming license is essential.
FanDuel and DraftKings Target Markets Without Legal Sports Betting
FanDuel and DraftKings are leveraging prediction markets to engage customers in areas where sports betting is yet to be legalized. FanDuel recently announced plans to launch a new app developed in partnership with CME Group, which will enable betting on a variety of major sports and financial benchmarks. The company has indicated it will withdraw these products from states once sports betting is legalized there.
Cautious Approach from Traditional Casino Operators
In contrast, traditional casino companies like MGM, Caesars, and Penn are taking a more cautious stance. These firms are cautious as regulators in various states advise against prematurely entering the prediction market space. Hornbuckle highlighted that casinos must comply with the licensing conditions imposed by each state and noted the industry’s historical resistance to federal involvement in gaming regulation.
