This Aggression Will Not Stand, Man

As more and more "well actually it's not gambling" products appear on the scene, one has to wonder when the licensed operators and states say enough is enough.

What is and isn’t gambling is a question without a good answer. It’s not a new debate, but it has become increasingly difficult to answer over the last decade.

Poker operators (retail online) have long argued that poker is a game of skill and, therefore, falls outside the gambling laws in most states.

Daily fantasy sports companies took a similar approach when their number was called in the mid-2010s, arguing their products were games of skill and not gambling. Customers were not placing wagers; they were entering contests.

More recently, DraftKings and FanDuel went to war against DFS 2.0 operators, claiming their DFS games too closely resembled sports betting.

California tribes (and other groups) are ringing alarm bells about sweepstakes operators.

And now we have prediction markets, which started with a minor foray into elections (e.g., what party will control Congress after the 2024 elections), quickly morphed into full-scale election betting (using the prediction market model), and have now segued into sports.

To say nothing about the skill games debates playing out in numerous states across the land-based gambling sector.

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I can’t imagine the licensed operators will just throw their hands in the air and tell sweepstakes companies, prediction markets, and whatever else is coming down the road, “Good for you! You outsmarted and outmaneuvered us.”

What should operators who have jumped through every hoop to get a license in New Jersey, Pennsylvania, Michigan, or any state that has legalized and regulated online casinos or sports betting do? Just deal with it?

If that’s the case, why not just relinquish your licenses? Why burden yourself with the financial and regulatory restraints of legal, regulated gambling licenses if anyone can launch an unregulated site that looks and acts like a gambling site?

Why waste your time and money trying to legalize mobile sports betting in California, Texas, Florida, and elsewhere?

Federal Pushback Coming?

Whether it’s election betting or sports, the CFTC under the Trump administration appears far more friendly to prediction betting operators. Still, even though there is some light at the end of the tunnel, there is an ongoing court case, not to mention the federal government’s penchant to change its mind on an issue, or for lawmakers to hold hearings and introduce legislation.

Even though the Trump administration is more open to allowing election and sports prediction markets, I don’t foresee them letting these companies run roughshod, which is the current state of things.

There are regulatory concerns, as Matthew Bain noted in a column at Sweepsy.com.

Imagine the MGC reaction if licensed operators in Massachusetts did this.

And then there is the envelope-pushing. As I mentioned in the opening, what started as a request to offer a market on which party will control Congress has, in the span of a few months, turned into “Who will win the Super Bowl” and “Who will be the NBA Eastern/Western Conference champion.”