The CEO of the American Gaming Association forecasted that the casino industry and states will come out on top in the battle.
AGA’s Bill Miller and Nevada Gaming Control Board Chair Mike Dreitzer appeared Tuesday night before business leaders and gaming industry executives at the Economic Club of Las Vegas at Park MGM. Prediction markets were the main topic of discussion.
Miller said the AGA has no definitive data on prediction markets, which have proliferated across the country over the last year by claiming they fall under the Commodity Futures Trading Commission headed by Michael Selig. But they have indications by what’s happening in Tennessee, where there are no casinos, but mobile sports wagering has undergone a “precipitous drop” with the arrival of prediction markets. Tennessee launched sports betting to fund school choice.
“This year, we’ve started to see softness nationally in the sports betting segment. We don’t have definitive data on prediction markets, but these guys are offering sports bets framed in a different context,” Dreitzer said.
Miller took aim at Selig for his comments that the CFTC has exclusive jurisdiction over regulating the prediction markets. Those who oppose that are getting taken to federal court by the CFTC and prediction market operators.
“The head of the CFTC, quite frankly, is a joke,” Miller said. “He believes somehow that what he’s doing is Uber and the rest of the country is the taxicab industry. That’s not the case. He’s not facilitating something that’s a public good. A federal regulator charged with regulating derivatives around agricultural contracts should not be engaged in it.”
Miller recounted that when Selig went before the Senate Agriculture Committee during the confirmation process, he said he’d hold back his point of view and let the courts or Congress settle the issue. As soon as he was sworn in, however, Selig became a cheerleader for the prediction market industry and facilitated “this scourge” by taking states to court.
The AGA, tribes, and state attorneys general are locked in legal battles across the country fighting prediction markets. Members of political parties in those states are lined up against them, Miller said. Though it will be a “tough slog,” Miller said they will prevail in the end.
“These guys thought they were going to blitzkrieg their way through the world,” Miller said. “But we’ve started to see real movement in the last month or two. We are a year and change into this fight. We’re making their life very difficult (in court). My view is there are multiple ends to this, but almost all of the ends end with us winning.”
Dreitzer, whose Board has been successful in state court to stop prediction markets from operating, doesn’t know when the cases will make it to the Supreme Court. The expectation is there will be a split in federal court cases that will become more defined and move it to the high court, he told the audience.
“From our perspective, every day that goes by is a day where people violate the laws of states,” Dreitzer said. “The law is the law. Any time you risk your money for the uncertain outcome of sporting events, but it’s gambling. We’re going to win this. I don’t know when, but it will be a good day.”
Dreitzer said prediction markets constitute a bigger threat than sports wagering: casino-style slots that would create online gaming in 50 states.
“Make no mistake, that’s what it’s all about. They will take these prediction algorithms, put it in a cabinet, and have distributed gaming casinos that are unregulated and untaxed sitting right next to Bellagio on Las Vegas Boulevard,” Dreitzer said. “They will be sitting in Dallas, Los Angeles, and Hawaii. That’s where this goes.”
Dreitzer said as regulators, they hold the view that they are pro-consumer protection. There’s a reason why there is oversight to prevent 16-year-olds from gambling and that the games are fair. The CFTC oversight has been lax and regulated through social media.
“Things are coming out to show the prediction markets aren’t fair,” Dreitzer said. “They come to our conferences to tell us it’s not gaming. How insulting is that? This is not for unserious people. Regulation is the backbone of a successful gaming industry in Nevada, the country, and the world. This is an insult on what we do for the good people who want this type of entertainment.”
