MGM and Caesars Reject Prediction Markets Over Gaming License Risks

MGM Resorts International and Caesars Entertainment have publicly announced they will not participate in the prediction markets sector, prioritizing protection of their existing gaming licenses over expansion into what many view as a lucrative emerging market. The decision, disclosed at the Global Gaming Expo (G2E) in Las Vegas, reflects deepening tensions between traditional casino operators and the rapidly growing prediction market industry.

MGM CEO Bill Hornbuckle revealed that the company had seriously considered entering prediction markets through its BetMGM platform in early 2025. However, Nevada regulators warned that offering event contracts could jeopardize MGM's gaming licenses, prompting the company to abandon the initiative. For a multinational operator with major projects and operations outside the United States, such regulatory risks carry substantial weight in strategic planning.

Caesars CEO Tom Reeg echoed similar concerns, noting that his company operates casinos and sportsbooks across multiple states. Regulatory action in a single jurisdiction could trigger ripple effects throughout Caesars' portfolio, making the potential downside of prediction market entry unacceptable relative to uncertain upside gains.

Both executives raised substantive questions about the current regulatory framework governing prediction markets. The core dispute centers on classification: prediction market operators describe their products as financial contracts regulated under federal commodities law, while traditional gaming companies argue that contracts based on sporting events are functionally equivalent to bets and should be subject to the same state-level gaming regulations that govern licensed sportsbooks.

Reeg highlighted a specific concern about conflict-of-interest protocols. He noted that prediction platforms currently allow trading on events that could directly affect traders' personal or business interests, such as speculative contracts on a potential acquisition of Caesars itself. He compared this regulatory gap to the early development of daily fantasy sports, suggesting prediction markets could gain unfair advantage by operating in a largely unregulated environment before states establish clearer rules.

Another friction point involves age requirements. Hornbuckle questioned why prediction platforms permit users as young as 18 while casino gambling and sports betting require customers to be at least 21 in most U.S. jurisdictions. This inconsistency undermines the argument that prediction markets operate under equivalent consumer protection standards.

The American Gaming Association (AGA) has intensified its criticism of prediction markets. AGA President and CEO Bill Miller stated that these platforms compete directly with licensed operators while avoiding certain state taxes, licensing requirements, and responsible gaming obligations. New Jersey has already filed suit over sports prediction contracts, and Arizona has taken licensing action against companies linked to prediction markets.

Prediction market operators including Kalshi and Polymarket maintain that federal Commodity Futures Trading Commission oversight authorizes them to offer event contracts nationally, creating a fundamental jurisdictional conflict that shows no signs of resolution. For established casino operators with substantial regulatory capital at stake, the prudent choice is to sit on the sidelines until this dispute clarifies.