Prediction markets are platforms where people can bet on the outcome of future events, like sports games or elections, by buying and selling contracts based on what they think will happen.
These markets, such as Kalshi, Robinhood’s event contracts, Crypto.com, and Polymarket, are regulated by the Commodity Futures Trading Commission (CFTC), a federal agency, rather than state gambling regulators.
This difference in oversight has caused tension with the casino industry, especially in major gambling states like Nevada and New Jersey.
Casino groups and companies, including the American Gaming Association (AGA), the Nevada Resort Association (NRA), the Casino Association of New Jersey (CANJ), MGM Resorts International, Caesars Entertainment, and DraftKings, have voiced concerns through public comments to the CFTC ahead of its April 30, 2025, roundtable.
Below, I’ll explain 10 ways prediction markets could impact the casino industry, with specific examples of casinos and their experiences.
1. Competition for Sports Betting Customers
Prediction markets let people bet on sports outcomes, like whether a team will win a game, in a way that’s similar to traditional sports betting offered by casinos. This creates competition, as customers might choose prediction markets instead of casino sportsbooks. The AGA, representing casinos like MGM Resorts and Caesars Entertainment, warned that sports event contracts mimic gambling, posing an “unfair economic threat” to regulated sportsbooks.
Why it matters: Casinos rely on sports betting for a big chunk of their revenue. Losing customers to prediction markets could hurt their profits.
The Venetian in Las Vegas, part of the NRA, could see fewer bettors if customers prefer Kalshi’s sports contracts, which are available nationwide and don’t require a trip to a casino.
2. Less Strict Regulations
Casinos in Nevada and New Jersey must follow strict state gambling laws, like getting licenses and paying taxes. Prediction markets, regulated by the CFTC, face fewer restrictions and can operate across the U.S. without state-specific licenses. The CANJ highlighted that prediction markets lack the consumer protections and taxes required of casinos, giving them an unfair edge.
Why it matters: This gives prediction markets an advantage, as they can offer betting options more easily and cheaply, attracting customers away from casinos.
Caesars Palace in Las Vegas, owned by Caesars Entertainment, has to comply with Nevada Gaming Control Board rules, while Kalshi can offer sports contracts online without similar oversight, making it easier for Kalshi to reach younger, tech-savvy bettors.
3. Impact on Local Economies
Casinos support jobs and tourism in states like Nevada and New Jersey. If prediction markets take away customers, casinos might earn less, leading to fewer jobs or less money for local businesses. The NRA and CANJ emphasized that prediction markets could siphon revenue from state-regulated casinos, harming local economies.
Why it matters: Casinos are a major part of the economy in gambling states, and a drop in their business could affect entire communities.
Resorts Casino Hotel in Atlantic City, a CANJ member, employs thousands of workers. The CANJ warned that prediction markets could reduce casino revenue, potentially leading to job cuts at places like Resorts.
4. Weaker Consumer Protections
Casinos have to follow strict rules to protect customers, like preventing underage gambling or ensuring fair play. Prediction markets have fewer protections, which could attract risky bettors but also raise concerns about safety. The AGA noted that prediction markets lack responsible gambling measures, undermining trust in regulated gambling.
Why it matters: If prediction markets gain a reputation for being less safe, it could hurt the gambling industry’s image, or it might draw customers who want fewer restrictions.
Borgata Casino in Atlantic City, owned by MGM Resorts, invests heavily in responsible gambling programs. The CANJ’s submission to the CFTC argued that prediction markets like Kalshi lack similar protections, which could undermine trust in regulated casinos like Borgata.
5. Betting on Non-Sports Events
Prediction markets let people bet on things casinos don’t usually offer, like election results or award shows. This could pull customers away from traditional casino games. The AGA has remained neutral on non-sports contracts but is concerned about sports-related markets competing directly with casinos.
Why it matters: Casinos focus on slots, table games, and sports betting. If customers spend money on prediction markets for other events, casinos lose out.
MGM Grand in Las Vegas, an MGM Resorts property, offers sports betting but not political betting. Kalshi’s contracts on election outcomes could attract MGM’s customers looking for new betting options.
6. Nationwide Access
Casinos in Nevada and New Jersey can only take bets from people physically in those states (or online within state borders). Prediction markets can operate nationwide, reaching more customers. The AGA and NRA argue that this nationwide access creates unfair competition for state-regulated casinos.
Why it matters: This wider reach gives prediction markets a bigger customer base, which could reduce the number of people visiting casinos.
Hard Rock Hotel & Casino in Atlantic City, a CANJ member, relies on in-state bettors. Kalshi’s ability to offer sports contracts to anyone in the U.S. could siphon off potential customers who might have visited Hard Rock’s sportsbook.
7. Lower Costs for Bettors
Prediction markets often have lower fees or better odds than casino sportsbooks because they operate like stock exchanges, matching buyers and sellers directly.
Why it matters: Bettors looking to save money might choose prediction markets over casinos, reducing casino revenue.
Golden Nugget in Las Vegas, part of DraftKings’ portfolio, offers sports betting with standard bookmaker fees. Kalshi’s platform, which avoids traditional sportsbook costs, could appeal to cost-conscious bettors, pulling them away from Golden Nugget.
8. Regulatory Conflicts
Nevada and New Jersey regulators have sent cease-and-desist letters to prediction markets like Kalshi, claiming they’re offering illegal gambling. Kalshi argues it’s protected by federal CFTC rules. The NRA and CANJ support these state actions, but Kalshi’s lawsuits, including a preliminary injunction against Nevada, create uncertainty. MGM Resorts’ CEO Bill Hornbuckle warned that prediction markets could invite federal intervention, undermining state gambling laws.
Why it matters: If prediction markets win in court, casinos could face tougher competition without being able to stop it.
The Bellagio in Las Vegas, an MGM Resorts property and NRA member, could lose customers to Kalshi’s contracts if Kalshi’s legal battles succeed, as the NRA noted in its CFTC comments.
9. Attracting Younger Bettors
Prediction markets are online and easy to use, appealing to younger people who prefer apps over visiting a casino.
Why it matters: Casinos rely on younger customers for future growth. Losing them to prediction markets could hurt long-term profits.
Harrah’s Resort in Atlantic City, owned by Caesars Entertainment, has invested in modern sports betting apps, but Kalshi’s sleek platform and Robinhood’s integration could draw tech-savvy millennials away from Harrah’s.
10. Potential to Redefine Gambling
If prediction markets become more popular, they could change how people view gambling, blending it with financial trading. This might force casinos to adapt or lose market share. DraftKings’ CEO Jason Robins suggested that prediction markets could expand the betting market, but the AGA warns they disrupt established regulations.
Why it matters: Casinos might need to offer new products or partner with prediction markets to stay competitive, which could be costly.
Wynn Las Vegas, an NRA member, has a high-end sportsbook. If prediction markets like Kalshi reshape betting culture, Wynn might need to innovate or risk losing customers to platforms offering sports contracts.
Prediction markets are shaking up the casino industry
Casino groups like the AGA, NRA, and CANJ, along with companies like MGM Resorts, Caesars Entertainment, and DraftKings, are pushing back through CFTC comments, citing threats to their businesses and state regulations.
Casinos like The Venetian, Caesars Palace, and Resorts Casino Hotel are already feeling the pressure.
The outcome of legal battles and the CFTC’s roundtable on April 30, 2025, could decide how big this impact will be.