The latest illustration of the warp-speed spread throughout the United States and into Nevada was a troika of prediction market announcements last week, paired with the glacial pace of almost two dozen litigation between the companies and gaming regulators.
The back-and-forth legal filings are seen by industry leaders and analysts as harmful to the regulated sports betting sector.
Sports betting behemoth DraftKings declared on October 21 that it was purchasing prediction market company Railbird Exchange. Kalshi and Polymarket struck licensing deals with the National Hockey League the following day.
However, such agreements were eclipsed on Friday afternoon when the Nevada Gaming Control Board said that Crypto.com had promised to refrain from offering contracts for sporting events in the state until its legal dispute with the authorities was settled. In its challenge to the regulatory agency’s cease-and-desist complaint, U.S. District Judge Andrew Gordon denied the firm a preliminary injunction.
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Control Board Chairman Mike Dreitzer warned the industry that sportsbook operators who provide event contracts in Nevada, or anyplace else, risk losing their gaming license.
Prediction markets, which are governed by a federal commodity-focused regulatory panel, are available online in all 50 states and enable people to place “yes” or “no” bets on a variety of events, including pop culture, politics, entertainment, financial markets, and even the weather.
Following the Global Gaming Expo (G2E), where the topic dominated the conference, gaming researcher John DeCree of CBRE Equity Research noted in a research note, “Prediction markets are moving too fast for the status quo to survive.”
DeCree stated that it might take the courts up to 18 months to rule on the claims, including those concerning Nevada.
Nevada is also confused.
Gordon wrote this month that Crypto.com can provide contracts on whether a sporting event occurs but not on who wins, following a favourable verdict in May that permitted prediction market Kalshi to continue sports contracts.
In the meantime, the NHL’s agreement with Kalshi and Polymarket and DraftKings’ acquisition of Railbird added complexity to an already complicated scenario.
During a keynote address at G2E, Jason Robins, CEO of DraftKings, made no secret of his company’s interest in prediction markets. In August, DraftKings—which does not have a Nevada license—applied to become a member of the National Futures Association, which is seen as a first step toward starting its own prediction markets. He claimed that because larger states like Texas and California have not authorized sports betting, the businesses are thriving.
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