CEO Says Prediction Market Not in the Future for Caesars

Caesars Entertainment CEO Tom Reeg has made it clear that the iconic gaming company will not navigate the tumultuous waters of prediction market sports event contracts, fearing it would tarnish the company’s relationship with state regulators.

Cautious Approach

Unlike mobile sports betting leaders FanDuel and DraftKings, Caesars CEO Tom Reeg announced on a third-quarter earnings call that his company would not be venturing into the prediction market category.

State gaming regulators of several states have been engaged in a legal battle with the likes of Kalshi and others that continue to operate in all 50 states, offering sports event contracts in direct defiance of state gaming laws.

“We will not put any of our licenses at risk,” Reeg told investors and analysts. “We believe what’s happening in prediction markets is sports gambling. If there’s a path that develops where we can participate in a way that doesn’t put licenses at risk, you should expect we would be prepared to go down that path, but we’re watching it the same as you are.”

As stated above, Reeg did leave the door ajar to exploring the prediction market, but only when the legal drama has been resolved.

Caesars Digital President Eric Hession reiterated Reeg’s remarks by adding, “As we’ve said before, we can’t be out on the lead on this one. There’s still uncertainty. I’m sure you’ve seen some of the letters from the regulatory agencies.”

Nevada Gaming Regulators Hold Sway

Both Caesars and MGM Resorts International are based in Las Vegas, which means abiding by the dictates of the Nevada Gaming Control Board (NGCB) is mandatory for their survival.

Bucking the system and contradicting the NGCB’s perspective concerning the prediction markets would put both Las Vegas-based entities at odds with the authorities that license them.

NGCB Chair Mike Dreitzer issued a memo in October to all licensees titled “Sports Event Contracts Are Wagers.” This left nothing open for interpretation, and the two gaming powerhouses have taken notice. In addition, Dreitzer also said in his memo that exploring prediction markets in any other jurisdiction would also draw the ire of the NGCB.

Currently, the NGCB is embroiled in lawsuits with two separate prediction market entities. Kalshi won its first-round legal battle when Judge Andrew Gordon granted a preliminary injunction allowing Kalshi to operate in the Silver State.

But curiously, the same judge ruled against Crypto.com using a similar legal argument that it is governed by the Commodity Futures Trading Commission, whose authority supersedes that of state regulatory agencies.