Casino Chiefs Call Prediction Markets 'Obscene' and Turn to Congress, at a Price

LAS VEGAS — Bill Hornbuckle, chief executive of MGM Resorts International, reached for a blunt word to describe the newcomers upending his industry: "obscene."

Speaking this week to a ballroom of executives at the Global Gaming Expo, he said that was the only fitting description of what prediction markets are doing. Then he offered an example. An 18-year-old in Utah, a state that permits no gambling of any kind, not a casino, not a lottery ticket, not a bingo hall, can pull out his phone and bet on professional sports.

"Think about that," Mr. Hornbuckle said.

A licensed sportsbook in Las Vegas, operating under rules the industry calls the strictest in the world, could not legally accept that teenager's football wager. The teenager's actions are the same either way, Mr. Hornbuckle said. What differs is who takes the other side of the bet.

That argument, that prediction markets like Kalshi are sportsbooks dressed as financial exchanges, has become the defining fight in American gambling. With more than 25,000 industry professionals packing the Venetian's expo floor, the sector's most powerful voices made clear this week that they intend to escalate it.

A 'Cavalier' Rival

Mr. Hornbuckle saved particular scorn for what he called the "cavalier approach" of prediction-market executives, who have dismissed casino complaints as incumbent grumbling. That attitude, he said, damages the entire industry, eroding decades of public trust and the bargain under which states legalized gambling.

He spoke Tuesday morning at the expo's opening keynote, moderated by CNBC correspondent Contessa Brewer. The session followed an address by Bill Miller, president of the American Gaming Association, who a year ago called the platforms "a threat to the integrity of regulated gambling." Tom Reeg, chief executive of Caesars, also took the stage.

Craig Billings, chief executive of Wynn Resorts, offered a quieter warning that was in some ways more revealing. Gambling companies, he noted, have spent a century keeping Washington out of their business. That casino leaders are now all but pleading for congressional intervention shows how grave the threat is. It is also a gamble.

"The fact we're even talking about Congress getting involved in a gaming-related issue is a concern," Mr. Billings said.

It was an extraordinary admission. For generations, Las Vegas operated on a simple creed: gambling is a matter for the states, and Washington should stay away. Now the industry is lobbying for the kind of federal pre-emption it once dreaded, because a competitor that answers to no state looks worse.

A Legal Gray Zone

That competitor is a new kind of financial exchange. Kalshi, based in New York, is registered with the Commodity Futures Trading Commission. It argues, with considerable legal force, that its sports "event contracts" are federally regulated swaps, meaning trades rather than bets, and that federal law therefore shields them from state gambling regulators.

Kalshi began offering contracts on game outcomes in earnest in early 2025. Sports have since come to dominate its business, reportedly accounting for more than 85 percent of trading volume. Some analysts forecast that the market for sports event contracts could exceed $1 trillion a year by 2030.

To casino executives, this is regulatory arbitrage passed off as innovation: the same product as a sports bet, sold nationwide without a gaming license or state taxes. It also skips the age limits, advertising rules, self-exclusion lists and responsible-gambling programs that licensed operators must maintain. Kalshi permits trading at 18. In most states with legal sports betting, the minimum age is 21.

Kalshi and its defenders reject that framing. In court filings and public statements, the company has described itself as a serious financial market offering hedging tools under federal oversight, and has called the casino campaign naked protectionism. Its supporters add that it monitors its markets for manipulation and bans insider trading, safeguards offshore sportsbooks have never offered.

A Patchwork in the Courts

So far, the courts have given both sides something to cite. The industry's momentum appeared to crest Friday, when a panel of the Sixth Circuit ruled that Kalshi's sports contracts are not swaps and are therefore subject to state regulation. If the decision stands, it would gut the company's core defense. The opinion also noted that the exchanges routinely serve customers as young as 18.

But Kalshi has won rounds, too, persuading other judges that federal commodities law pre-empts state enforcement. The result is a contradictory patchwork: permitted in one place, barred in another, under appeal nearly everywhere. Lawyers on both sides now describe a Supreme Court showdown as a matter of when, not if. For an industry built on regulatory certainty, the confusion is itself the injury.

Turning to Washington

Hence the pivot to Congress. In July, Representatives Mark Amodei, Republican of Nevada, and Steven Horsford, Democrat of Nevada, introduced the bluntly titled Prediction Markets Are Gambling Act, which would bar federally registered exchanges from listing sports and casino-style contracts. In March, Senator Catherine Cortez Masto of Nevada introduced companion legislation with two colleagues.

More bills have followed, each taking a different swing at the same target: banning election contracts, banning sports contracts, creating new regulatory frameworks, or restricting officials from trading.

The industry's most potent argument is financial. Mr. Horsford asserts that prediction markets have already cost states more than $1 billion in forgone gaming-tax revenue, money that would have paid for schools, roads and public programs. Licensed operators pay some of the highest effective tax rates in American business. Their unlicensed rivals pay nothing to book the same action.

State officials have been receptive. In May, Maryland went to federal court to block Kalshi's football contracts, arguing that yes-or-no offerings on Baltimore Orioles games are indistinguishable from sports bets. This month, Missouri's attorney general sent cease-and-desist letters to six companies, Kalshi, Polymarket, Crypto.com, Novig, Underdog and Robinhood, over what the state calls unlicensed sports wagering. Minnesota lawmakers passed a bill banning the markets outright.

The fight has even divided the industry's own ranks. In May, the Aria, MGM's luxury resort on the Strip, abruptly canceled its contract to host Predict 2026, the prediction-market industry's flagship conference, forcing organizers to relocate to New York. The Nevada Gaming Control Board said it had pressured no one.

The Risks of Winning

That history explains the urgency in the keynote hall this week, and the unease beneath it. The American Gaming Association reported this spring that 81 percent of executives consider the markets a very significant threat, making them the trade group's top regulatory priority. Adam Greenblatt, chief executive of BetMGM, has made criticizing the exchanges a regular feature of his earnings calls.

Yet Mr. Billings's caution hangs over the push for federal action. The casino business learned long ago that federal interest, once invited, rarely stays confined to the subject that summoned it. A Congress empowered to define gambling could just as easily turn its attention to the industry's own advertising, credit practices and tax treatment.

It is also unclear what victory would look like. Even if Congress banned sports contracts on domestic exchanges, demand would likely migrate to offshore sportsbooks that answer to no one. The Congressional Research Service has warned that restricting domestic exchanges could push bettors toward the very black-market operators the industry claims to fear.

For now, industry leaders are choosing the fight in front of them. Mr. Hornbuckle's message to state regulators was to hold the line and treat a bet as a bet, no matter what paperwork accompanies it.

Outside the hall, the slot machines chimed as they always have. Inside, the conversation kept circling back to the company that wasn't there. Kalshi was not invited to the Global Gaming Expo. It didn't need to be.