Prediction markets 'not authorized' in Washington State

The Washington State Gambling Commission has issued an official guidance to operators following an "increased interest" in prediction markets and the trading of event-based contracts.

The regulator confirmed that offering event-based contracts or participating in prediction market operations are "not authorized" in Washington State, but also touched on the potential growth of such gaming types.

"While prediction markets are an unauthorized activity in Washington State, we acknowledge that the future of prediction markets, including those for sports, political events, etc., remains a subject of ongoing litigation both federally and in other states," the Commission said.

"We will continue to monitor the ongoing cases as they progress through the court system and will provide updates once the courts provide further guidance. Washington consumers interested in gambling on sports are able to do so legally at Tribal casinos authorized to conduct sports wagering pursuant to Tribal-state gaming compacts."

Washington now joins fellow US states such as Pennsylvania, Michigan, Connecticut and Maryland in warning operators of prediction markets activity.

On December 5, Louisiana Gaming Control Board (LGCB) Chairman Christopher Hebert stated "any event-style 'contract,' 'swap,' 'market' or other 'financial instrument' that allows individuals to stake value on the outcome of a sporting event, other than by a Board licensed or permitted sports wagering operator, constitutes illegal gambling."

Hebert also shared that any form of "exchange wagering" is classified as sports betting under state gambling laws.

The LGCB has exclusive jurisdiction to regulate all gaming activity as a result of the Louisiana Gaming Control Law, the Louisiana Criminal Code and other state legislation.

Hebert stated the LGCB would still view prediction market offerings as illegal gambling even if the contracts are listed on an exchange regulated by the Commodity Futures Trading Commission.

However, if an operator found to be offering sporting event contracts was licensed for sports wagering in Louisiana and met all requirements as a licensee, it would be considered a "different matter" by the regulator.