MGM Stands with State Regulators…For Now
One of Hornbuckle’s first statements on sports prediction markets was in support of state regulators. He shared that three have issued warnings against offering the controversial markets, and that BetMGM would comply.
The position of states on the industry was a theme during the CEO’s stop at G2E. He committed to continuing to follow their regulations, though he did leave the door open for that to change in the future.
“When we have gaming regulators in three states now telling us ‘don’t do that,’ we have no choice but to take a position. Are we following it? Would we be a fast follower if, for some reason, it were to break through? Absolutely.” Horbuckle stated during the panel.
What Does MGM See That Their Rivals Don’t?
One reason the MGM CEO’s comments are making waves is that they offer a very different perspective in prediction markets.
When talking about potentially joining the new industry in the future, one line from Hornbuckle stood out: “Are we following it? Would we be a fast follower if, for some reason, it were to break through?”
When listening to executives from other sportsbooks, state lawmakers, and the American Gaming Association (AGA), it becomes clear they believe the success of sports prediction markets is a certainty. However, Hornbuckle’s small comment shows that he isn’t sold.
BetMGM leadership has also been clear about aligning with states when speaking with investors. They argue that sports prediction markets are illegal and dangerous, making it a bad investment for one of the largest gambling brands in the world.
Is Momentum Turning Against Prediction Markets?
While the comments from MGM stand out from the rest of the sports betting industry, they aren’t unfounded.
Sports prediction market operators are facing expensive legal battles as more states and tribes file lawsuits. They have been protected by the Commodity Futures Trading Commission as those play out in court, but that could also be changing.
The CFTC, which currently has sole authority over the industry, sent out an advisory note letting operators know that state restrictions could be coming. That would end the ability for the platforms to operate in all 50 states, forcing them to geo-fence the markets.
The federal regulator remains without a leader after the White House’s nominee was pulled from consideration. Once a new nominee is approved, it could lead to the CFTC’s new stance changing overnight.
