Massachusetts Gaming Commission Bans Prediction Markets, Threatens Licenses
URGENT UPDATE: The Massachusetts Gaming Commission (MGC) has just issued a decisive warning to all gaming operators, declaring that prediction markets are strictly prohibited in the state. This announcement, made on October 26, 2023, underscores the MGC’s commitment to regulating sports betting within its borders and could have immediate consequences for operators who defy this directive.
The MGC’s letter, signed by executive director Dean Serpa, explicitly states, “Please accept this letter as notice that you are prohibited from offering sports-related event contracts in Massachusetts, directly or via an affiliate, related business entity, or other association.” Operators are now facing the possibility of license revocation if they attempt to engage with prediction markets, either locally or by directing patrons to such services.
Operators must respond formally within 10 business days to outline their compliance with this ruling. This requirement is notably stricter than those imposed by regulators in states like Arizona, Nevada, and Ohio, who have also cautioned against prediction markets but did not demand such detailed plans.
This warning comes on the heels of a significant meeting held by the MGC to discuss prediction markets, just one day before FanDuel announced its plans to launch prediction markets in partnership with CME next month. Meanwhile, the Nevada Gaming Control Board revealed that FanDuel surrendered its Nevada retail license, while DraftKings withdrew its applications in the state. These moves are closely linked to the operators’ ambitions to tap into the prediction market sector.
Massachusetts has made it clear that any actions taken by other states about prediction markets could influence its decisions. The MGC noted, “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.” This implies that if, for instance, the Ohio Casino Control Commission revokes a license due to prediction market violations, Massachusetts could reconsider local licenses in light of that action.
The push against prediction markets isn’t new for Massachusetts. In September 2023, the state filed a lawsuit against Kalshi, seeking to block its operations within the state, a case currently set for hearing next Tuesday. The MGC aims to secure an injunction to prevent Kalshi from offering its services locally.
As the regulatory landscape continues to evolve, operators like FanDuel and DraftKings are striving to adapt. DraftKings recently announced its acquisition of the Railbird platform, which is already licensed by the Commodity Futures Trading Commission, to launch prediction markets including sports events.
The MGC’s actions reflect a critical moment in the evolving world of sports betting, aiming to maintain strict control over gaming practices in Massachusetts. As operators scramble to comply with this new directive, the implications for the state’s gaming industry—and for bettors—could be profound.
Stay tuned for further updates as this story develops.
