Nevada Gaming Control Board Chairman Mike Dreitzer called the Commodity Futures Trading Commission’s new prediction market rules “an untenable distinction without a difference,” arguing that sports event contracts are sports betting in another wrapper.
Speaking on the Indian Gaming Association’s weekly webinar on October 14, Dreitzer said the CFTC’s rulemaking, advanced October 9, did not surprise him. The agency issued two proposals: one expands the federal definition of a “swap” to include event contracts tied to cultural events, weather, politics and sports, and an interim final rule excludes casino-style gambling, including sportsbook wagers and casino games, from that definition. The interim rule takes effect upon publication in the Federal Register.
Dreitzer told the webinar audience the CFTC has been working closely with the Designated Contract Markets, the exchanges registered with the agency. He compared a $10 bet on an NFL game with a $10 contract on the same outcome and said the transactions are effectively the same thing. Exiting a position before a match ends, he argued, does not separate the two products, because online sportsbooks have long offered cash-out features.
He also took aim at who stands on the other side of the trades. Some Designated Contract Markets, he said, create third-party companies to take the opposite side of retail positions, and hedge funds and affiliated trading firms may trade against participants. “I call that being a bookie,” he said.
The comments put Nevada, the country’s largest casino regulator, squarely against the CFTC’s framework. The rules would give prediction market operators the legal foundation they use to claim exemption from state gambling law, and Dreitzer’s remarks signal Nevada intends to keep contesting that in rulemaking and in court. Sports event contracts are already unavailable in Nevada and Michigan.
The federal move lands amid widening litigation. Kalshi filed for a rehearing in the US Court of Appeals for the Sixth Circuit the same day the CFTC advanced its rules, in a case it lost to Ohio and Tennessee regulators; that court had unanimously found prediction markets are not exempt from state gambling regulations, including taxes. Five states have sued prediction market operators, and Underdog has sued seven states, most recently Tennessee on October 14.
BetMGM CEO Adam Greenblatt said on his company’s third-quarter earnings call that he expects the Supreme Court to rule against prediction markets, arguing sports event contracts go beyond what Congress intended. The justices have not decided whether to hear the case.
Petra Vanhoof has spent the better part of a decade following the shifting tides of gambling regulation across Europe and beyond. She came up through the compliance side of the industry before pivoting to writing, which gives her a grounded, no-nonsense perspective on the rules, loopholes, and political maneuvering that shape how operators actually do business. She is particularly drawn to the gap between what regulators say and what the market ends up doing in response.