Nevada Fears Looming Threat of Prediction Markets in Casinos

With each passing day, prediction markets appear to be here to stay. With CNBC and CNN both signing media partnerships with Kalshi, a leading company in the sector, these platforms seem to be firmly embedded in the mainstream.

Nevada Fears ‘Prediction Casinos’ May Be Around the Corner

This is precisely what the Nevada Gaming Control Board (NGCB) fears. The regulator has been one of the most outspoken critics of prediction markets and now sees a potential threat looming from the sector, citing the possibility of these markets, which currently focus on sports event contracts, spilling over to casino games and slots, potentially spelling a doomsday scenario for the traditional gambling industry.

During the Friday State Bar of Nevada’s annual Gaming Law Conference at the Suncoast Hotel & Casino, NGCB Chairman and Executive Director Mike Dreitzer reinforced the regulator’s opposition to the way Kalshi, Crypto.com, Robinhood, and others operate.

In Dreitzer’s opinion, they skirt gaming laws by citing financial regulation under the Commodity Futures Trading Commission (CFTC).

The regulator’s firm opposition has led to interesting developments in Nevada specifically, with FanDuel and DraftKings surrendering their licenses, over the regulator’s belligerence towards prediction markets.

Dreitzer explained that there was no legal way to participate in prediction markets within the Silver State and that the state itself was adamant in its opposition against the sector, seeing it as a loophole.

However, the fact remains that prediction markets are an “existential issue” for the gambling industry, with the top watchdog official expressing worry about a day when prediction markets may try to encroach on games of chance used in casinos and based on Random Number Generator (RNG) mechanics.

Big Gambling Companies Dropping Conventional Licenses Already

“Prediction casinos” is a taboo that must never become a reality, Dreitzer warns. Yet, these fears – even if they did materialize – are unlikely to actually impact the land-based sector. They would most likely affect gambling companies per se, and especially those in the iGaming sector.

As things stand, though, DraftKings and FanDuel have pronounced themselves ready to ditch their conventional sports betting licenses in order to pursue prediction markets. Who is to say that they won’t also consider withdrawing from traditional iGaming?

Prediction markets in casinos would not necessarily spell the end of online casinos, but they would change the game. For the time being, no “prediction casinos” have been launched, by Dreitzer’s urgency on the matter could be a clear sign that they are in the offing.