At the Global Gaming Expo (G2E) tradeshow in Las Vegas, Nevada Gaming Control Board (NGCB) Chairman Mike Dreitzer, MGM Resorts International SVP & Chief Compliance Officer Stephen Martino, Wallach Legal Founder Daniel Wallach and American Gaming Association (AGA) VP of Government Relations Tres York took part in a discussion comparing regulation across various betting verticals.
York began the panel by claiming regulators hear “a lot of whining” from prediction market operators, prior to asking Dreitzer what exactly prediction markets are “innovating.”
“Is it innovative that they take bets from 18 or 19 year olds? Is it innovative that they take bets in states where it is illegal?” Dreitzer responded.
“Is it the fake volume through wash trades? I’m still looking for it. Is it the endless trades subject to manipulation? I’m wondering where the innovation ends.”
The NGCB Chairman claimed “crime and deception is not innovation,” and believes “if you take away all that criminal conduct, what are you left with?”
Dreitzer continued: “These exchanges are not that special. They can be regulated. Even if they were true betting exchanges they really aren’t special. Show me where the innovation is. The notion that casino monopolies are being protected by regulators couldn’t be farther from the truth.
“Our licensees make the correct choice to be part of a regulated gaming community because they understand the importance of that. It’s not a matter of protecting, they make that choice. You can’t compete with entities that are committing crimes.”
Martino backed the claims by stating prediction market operators “can’t beat regulation,” although the MGM Resorts executive remains fearful of underage individuals trading event contracts with a son about to enter university himself.
“It’s unfathomable the lengths they have gone to construct something which is irresponsible. It’s the responsibility of all of us to stand up and point out where these things have fallen short. There hasn’t even been an attempt to operate in a regulated manner,” Martino said.
Referencing recent court decisions in the Sixth and Ninth Circuits, Wallach described the rulings as a “tidal wave,” and believes Kalshi’s arguments are the “flimsiest of legal precedent.” The Wallach Legal Founder stated sports event contracts “create risk,” and believes the Supreme Court has the required “bookends” to properly regulate prediction markets.
“It seems to me that prediction markets don’t want this issue settled right away,” Wallach said. “Overall, no matter what happens, I think the states are sitting in a very good position.”
Wallach confirmed his belief that a decision from the Supreme Court on prediction markets’ legality could come as soon as mid-2027, stating you “can’t argue” with 44 Attorney Generals coming to a common understanding.
Dreitzer noted the importance of finding outside counsel to help Nevada prohibit sports event contracts, believing the “record speaks for itself” given the regulator has yet to lose in court since doing so.
Martino believes prediction markets are about “chasing losses,” while there is only a “small sliver” of consumers touting victories on respective platforms. The MGM Resorts executive claimed there is an “absolute absence” of motivation from prediction market operators to conduct business in a regulated fashion.
“The gaming industry is, outside of nuclear power plants, the most regulated industry in the country. For all of us here that have been around the industry, particularly on the matters of youth gambling, it is appalling and puts us at risk,” Martino said.
“I think there are legal tactics that are meant to get this case before the Supreme Court. For us on the compliance side, there is work to be done because of the damage (prediction markets) have caused. The challenge is how we are going to climb out of this.”
Dreitzer closed the panel by stating “you can’t conflate” sports betting and prediction markets, believing “this is hurting people every single day.”
“It’s hurting people who don’t have the money to do it. It’s hurting the people who don’t have a line between their investment accounts and their betting accounts.”
On the first day of G2E, Indian Gaming Association Chairman David Bean and American Gaming Association President & CEO Bill Miller also discussed prediction markets as part of their own respective session.
Kalshi Head of Corporate Development Sara Slane disputed claims which claim prediction markets fail to pay state taxes on September 25, believing the ‘current crusade… is somewhat baffling’
