The chair of the Nevada Gaming Control Board said tribes and states must stick together to fight an “existential threat” posed by sports betting prediction platforms.
Mike Dreitzer gave some of his most detailed comments about the latest saga over prediction markets since he spoke to Nevada gaming attorneys in December. He appeared last week at the Indian Gaming Association conference in San Diego.
“This is not right. It’s a workaround supported by private equity and it undermines every single thing we all know and believe in about the importance and safety of our industry,” Dreitzer said.
Nevada obtained restraining orders against Kalshi and others to keep them from operating in the state.
Dreitzer emphasized the importance of states and tribes sticking together in their fight against prediction markets, calling it a jurisdiction-by-jurisdiction issue and not simply a tribal and commercial casino matter. He said he’s amazed how gaming interest and non-gaming states like Utah have joined to fight this battle.
“It’s a gaming issue all over the United States and, frankly, as we’ve seen in some of the more recent news, all over the world,” Dreitzer said. “It’s very real, and there are very specific instances. You’ll see the potential for prediction-type slot machines and casino equipment. That’s quite possible. With Class II gaming, you have bingo and people with great ingenuity said, ‘Why don’t we offer it in a cabinet with an entertaining display?’ There’s something about our industry with respect to ingenuity and working on the cutting edge. That’s great. Sometimes it makes sense and sometimes, where there’s already established law, it doesn’t.”
Dreitzer also cited historic horse racing that also looks like a slot machine.
“In Spain at the ICE conference, I saw a five-reel video slot machine that was based on prediction outcomes. Potentially, the next thing that will come is online gaming in all 50 states.”
Dreitzer also discussed prediction lounges, where they could install prediction-based slot machines that aren’t taxed. Polymarket opened a pop-up lounge in Washington, D.C., near the White House in March to showcase prediction markets.
“Make no mistake. The stakes here are extraordinarily high. It strikes to the heart of fair gaming for all that provides economic opportunity, tax revenue base, and tried-and-true safe entertainment. All of those things are in danger as a result of what’s happening. We can’t abide any sort of letting up. We can’t abide by any sort of permission and say you can do it and we’ll see what happens. Nevada stands with states and tribes that have been great in this fight. It’s heartening to see the industry unify as much as it has.”
Dreitzer joked that he was letting people in on a “little secret”: If someone risks money on the outcome of a sporting event, that’s gambling. Prediction markets have argued they’re authorized under the Commodity Futures Trading Commission and that the actions are swaps.
“Nevada doesn’t stand against prediction markets,” Dreitzer said. “We’re for prediction markets under the correct circumstances and for any type of innovation. Nevada has done a lot in the last six months around accepting new technology and innovation. This matter is to be left to the states and to the tribes. That will work its way through the courts.”
Dreitzer insisted that prediction markets don’t fully understand who their customers are, how old they are, and what their address is. There aren’t any clear protections and requirements around problem gambling and anti-money-laundering reviews are non-existent. Bettors also lack redress if they have a problem with their prediction contract and there are no controls over insider betting.
“All of these things matter. The reality is proper regulation is difficult, but necessary to make sure people engage in gaming — whatever format in your jurisdiction — in a fair way without any compromises across the issues we referenced.”
There are instances of underage people using prediction products, insider betting, and criminal elements laundering money, Dreitzer said.
“If you have a company that wants to engage in prediction-type products, Nevada would welcome a presentation and potential participation, but it has to be done in accordance with the regulations. You have to pursue licensing just like everybody else, no more or no less. This end around is why we are here.”
Dreitzer said any notion that this is peer-to-peer betting, with prediction markets not serving as the house like a sportsbook, isn’t believable. He asked who was sitting on the other side of a six-team parlay on a Wednesday afternoon, except for maybe an affiliate of the operator.
Over the last several months when Nevada gave its opinion about licensed companies engaging in prediction markets in other states, Dreitzer pointed out that Nevada has strong foreign gaming laws and looks carefully at what licensees do in other states to prevent licensed operators from participating there.
“We said we were looking not only at illegal gambling, which this is, in other states, but we also looked at tribal compact rights,” Dreitzer said. “Actions that were in violation of tribal compact rights we also looked at when it came to suitability in Nevada. We view those on par with state laws.”
