Massachusetts casino regulators are ordering their licensed sportsbooks to abstain from participating in sports contract prediction markets in response to a similar decision in Nevada.
The seven sportsbook operators in the state were cautioned by the Massachusetts Gaming Commission (MGC) on Thursday that they are not permitted to collaborate with prediction markets or provide contracts for sporting events in the province. The MGC letter was sent after a number of Bay State-licensed bookmakers announced their plans to join the prediction market.
"In the event you offer sports-related event contracts in Massachusetts or direct patrons to such event contracts being offered in Massachusetts, the Commission may take steps up to and including revocation of your license. In addition, to the extent any other regulator takes action against your license due to your operation in the prediction market space, such action may inform decisions related to your suitability in Massachusetts,” MGC Executive Director Dean Serpa wrote.
Bally Bet, BetMGM, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, and Penn Sports are among the companies with Massachusetts sports betting licenses.
Forecast Market Crackdown
The Nevada Gaming Control Board (NGCB) and Massachusetts gaming regulators concur that prediction markets that offer event contracts on sporting events qualify as sports gambling.
“Wagering on sporting events in Massachusetts is strictly governed by M.G.L. c. 23N, which defines ‘sports event’ or ‘sporting event’ as ‘a professional sport or athletic event, collegiate sport or athletic event, a collegiate tournament, motor race event, electronic sports event, or other event authorized by the Commission under [Chapter 23N]…’ As such, wagering on sporting events may only be offered on authorized sports wagering platforms licensed by the Commission,” Serpa explained.
The MGC announcement was made just hours after DraftKings and FanDuel left Nevada's sports betting market to concentrate on their prediction market initiatives. Flutter Entertainment, the parent company of FanDuel, gave up its license to wager on sports, while DraftKings gave up on trying to get into the state.
The NGCB came to the conclusion last month that contracts for sporting events are bets. The majority of prediction market contracts are in violation of Nevada's betting rules, according to the board, which is frequently referred to as the "gold standard" of gaming regulation.
"The Board considers offering sports event contracts, or certain other event contracts, as constituting wagering activity under NRS 463.0193 and 463.01962. Wagering occurs whether the contract is listed on an exchange regulated by the Commodity Futures Trading Commission or elsewhere,” the NGCB wrote.
“Examples of event contracts that the Board specifically considers to be wagering subject to its jurisdiction include event contracts based on the outcome or partial outcome of any sporting or athletic event, or other selected events such as the World Series of Poker, the Oscars, Esports, and political elections (“Sports and Other Event Contracts”),” the notice continued
Boston-Based DraftKings
The MGC notification is extremely concerning to DraftKings, a corporation that has its headquarters in the capital city of Massachusetts. The MGC stated that it reserves the right to address its licensees running PMs outside the state in the future, despite the state gaming agency's claim that its mandate addressing prediction markets solely applies to such operations within the commonwealth.
"The letters do not speak to sports-related event contracts offered outside of Massachusetts or event contracts in general, though the Commission reserves the right to address those topics in the future,” the MGC wrote on its website.
Next month, DraftKings will launch DraftKings Predicts. FanDuel is as well.
