iGaming Daily

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Prediction markets are once again stirring the US gaming conversation, but this time, the temperature feels different. Suddenly, what looked like a niche regulatory dispute now carries implications for sportsbooks, exchanges, and the broader structure of the market. For executives across online gambling, the question isn't just who wins this case, it's whether we are watching the early stages of a deeper jurisdictional realignment. Today, we're breaking down what changed, why it matters, and what Operators should be watching next. Welcome to iGamingDaily. presented to you by OptiMove, the creator of positionless marketing and number one player engagement solution for iGaming and sports betting operators. Learn how OptiMove positionless marketing is changing how iGaming teams operate. Discover how operators are using OptiMove's positionless marketing platform to launch personalized CRM campaigns, dynamically change casino lobbies and bet slips and create engaging, gamified experiences. Learn more at OptiMove.com To see how this approach comes to life, Optimove Connect returns to London on March 11th and 12th, 2026. It is the only user conference where marketers from around the world share real-world results of positionless marketing driving, efficiency and ROI. Register at connect.optimove.com. I'm Fernando Nott, Media Manager for SBC. And to discuss what's going on in the US, I'm joined by uh two of our best are America's finest, Canada's finest as well or UK finest too. mean, Tom, you're being a bit of a gray area there, but Tom Nightingale and Justin Byers today with us. Guys, how are you today? Tom, all good? What would you say? Would you call yourself uh North America's finest or uh are you still a Britain finest? oh Transatlantic finest. Transatlantic, yeah. You can use the catchall term. That covers it nicely, I think. Yeah, I think that works. That works just fine. And yeah, America's finest, Byers. Justin, how are you today? I'm good. I'm great, actually. This is my first time hopping on in the new year, so I'm excited to get this discussion going. Yeah, I mean, most people won't be able to see it, but behind Justin is a very, very pretty Christmas tree. It's February the 19th, the time we're recording this, but Justin was so excited to be on the pod, he decided to keep it on. So we have a nice New Year's vibe. But now to what we are here to discuss. There's of course no surprise in the fact that we are seeing the gaming agenda in the US marked by prediction markets already early in 2026, the latest story. The CFTC chair filed an amicus brief on a crypto.com case. So Justin, why don't we start by breaking down what happened? Yeah, this is a very unique situation. And it's a situation where we're kind of see seeing a federal agency take action against a state regulatory body. And so this all boils down to sports event contracts. And what we've got here is a federal agency, the CFTC. wanting to keep their regulation over sports, even contracts and event contract trading in general. While we have a regulator, Nevada's game control board wanting to also have authority over the regulation of the contract. And in this case situation, we have crypto.com right now in the middle of it as a provider of event contracts. And we have the CSDC backing crypto.com against state regulatory action. kind of leveraged by Nevada. And, uh, well, this decision, they say like, it's actually surprised quite a few people because it sets a change of tone from what he was saying last year. So what changed between his Senate testimony when he said one thing and this amicus brief? Yeah, I think this whole situation is, has con a lot of attention because of that change of tone last year during the nomination process for Michael Selig. There was a opportunity for him to kind of share with everybody how he would approach if it contracts. And in doing so, he kind of deflected answers about how he would handle it. But he did reiterate that he will look to the courts on the issue. Now we're almost three months later or so, and he's completely flipped the script and he's having more of an authoritarian approach to this whole regulation of contracts and derivatives in general. by pushing that the CFTC is the only authoritarian regulator of these offerings. So it's interesting how Selig went from, okay, we'll use the courts to answer some of the questions you guys have to, okay, these questions shouldn't even be raised because the CFTC has all the authority. like Fernando, you asked the question, you know, what, like what's changed between the Senate testimony and, and now if I can be cynical for a moment, what's changed is that he's, he's got the job. He's in the job now. When he was in front of the Senate committee, it's very, very hard looking at what's happened since then to not feel like this was always the way that he was going to take things. He just wasn't going to say that in a confirmation hearing in front of a bunch of senators. The fact that, okay, he's just filed the amicus brief now in the crypto case, what, mid February? But it was January, wasn't it? I think it was last month that he came out publicly and said, CFTC is willing to intercede on court cases. That was a matter of weeks, really, let alone months from going from, we're going to look to the courts. I think we need to defer to the courts. We need to look to the courts for answers on these. I'm going to respect the courts. Actually, we're going to insert ourselves into this conversation in a very meaningful way. The drastic change of tone is obviously as Justin said, something that has particularly caught the eye about this. I guess Michael Citty got some inspiration from former Argentinian president Carlos Menem who said something like, if I had told you what I was going to do, you wouldn't have voted for me. yeah, it's a bit of a non-surprise there considering that. that side of things. I think we haven't clarified yet, but CFTC stands for Commodity Futures Trading Commission, just in case some of our listeners are not familiar with it. But Tom, Justin already kind of mentioned how curious this is. But if you had um government agency siding with Prediction Market on your bingo card, I guess you'd be cashing out by now. So that's quite unique. thing to see is curious to some extent. is this posture a legal strategy or do you think it's a political signal? mean, I think it's elements of both. What it definitely is, is it's a clear line of demarcation, right? This is a clear indication that for want of a better phrase, the Trumpian version of the CFTC is not only going to take a permissible stance on, you know, federal prediction markets and what is essentially like financial derivatives traders, right? Stepping into what is very clearly and historically been a state regulated area of sports betting. there's no, you cannot look at anything that's happening now and say, okay, this isn't, this isn't sports betting. Everything about it is sports betting on the sports event contract side. So to have the CFTC. So, firmly, guess, so staunchly come out and if not directly and explicitly support platforms like Kelshe and offering sports, then certainly say, we're kind of willing to go to bat for you at this point in what is, maybe we'll touch on this later, but what is quite frankly a much bigger issue than just sports betting? This is state, the idea of state oversight and state regulation versus federal. and the fact that the federal regulator is willing to go to battle against states. It's a pretty seminal moment really. will go to that just after the break, but before that, um just in the lawmakers were somewhat concerned with this new stance by Seelig. What was their reaction to this new uh commentary and this amicus brief? It's funny because their reaction was kind of similar to the general public's reaction. It was a little element of surprise. But given the nature of politics in the states, it's also somewhat expected just because of how things have been handled. Now, with lawmakers, it's interesting because lawmakers make their their money in their respective states. And now with this being a federal versus almost state issue, that puts lawmakers in a very precarious spot. And for some who support the idea of prediction markets having being regulated by the CFTC, it's it's a win for them. But for those who kind of want more oversight, more regulation, more controls, this is the exact flip of what they would want. And like we said, there's a lot to analyze about this case, what the aftermath could be, depending on where the court sides. So we're going to do a very quick break and we will be right back to continue breaking down this case and what the CFTC siding with Crypto.com under prediction market suffering may uh result in. So stay there and we will be right back. And we're back with more iGaming Daily to continue discussing prediction markets and the latest developments that come out of the United States. Of course, if you are subscribed to SVC Americas, you have already read about this, but if you're not, make sure you are subscribed to the newsletter of SVC Americas. And of all SVC media newsletters just go to svcamericas.com and find the newsletter tab and once you go there you will be able to click on all the boxes for all the rest of the newsletters so you can keep up to date with all news about the gaming industry worldwide and now back to the case we were discussing the amicus brief by the CFTC so Tom what's at stake in the ninth oh circuit appeal, could this ruling effectively redraw the map for sports related contracts nationwide? mean, yeah, it's hard not to feel that way. think that whenever the eventual ruling is, could effectively redraw the map. mean, it's essentially deciding, you know, I should say that, I mean, this is going to rumble on for a while yet, you know, like all of this prediction market stuff, but ultimately, essentially dictate whether or not the likes of Caoshi and Crypto.com and Polymarket can continue to do again sports betting business. find it difficult not to call it sports betting because it is but whether or not like Koushi Polymarket and crypto can continue to do sports trading business in Nevada in what would be direct conflict with what both the state's gaming regulator and the state's attorney general say. um Like I said earlier, I think on a broader and longer term scale, this is kind of about way more than gaming. Right. Okay. Like Nevada has been the historic center point, you know, of gaming in the U S I would argue that it's not anymore. Right. Okay. It's where, you know, Las Vegas still has the obviously lamb based casino. That's where you go. You know, that's where you go above anywhere else, but gaming has changed so much in the last few years. Um, but it's obviously going to be hugely significant, uh, which way the courts fall on this. Cause If they come out with whichever way they rule, you're coming out with either a fundamental agreement with state gaming rights or you're coming out with a fundamental agreement with the that federal derivatives regulatory rights should supersede gaming rights even when sports are involved. The CEOs of CESARs and MGM Resorts and people who have stayed back from the prediction markets realm because they value state licenses and they have deep roots in Nevada and that sort of stuff. They've reiterated numerous times that they expect this overarching issue probably to go all the way up to the Supreme Court and probably take another couple of years yet to work through. On the way there will be key decisions and key checkpoints, but I feel like it's an almost impossibly large issue really that goes beyond sports betting. could redraw the map for a lot of things, to be honest, I think. And do you see, of course, if this is going to scale up to the Supreme Court, we're going to have to wait and hashtag wait and see uh where this is going and we'll have to wait for a long time. So we will just stay on top of this. But if eventually, let's say it reaches the Supreme Court and court sides with CFTC and Crypto.com, do you think... This is this weekends the Nevada gaming control board and other state regulators. Yes Yes, I do think it would It you know, it's already we're kind of on dicey ground with that right because you have people like fan Jool and DraftKings who You know obviously operate state-regulated sports betting and I will say as well maintain in their earnings course like drafting CEO Jason Robbins and like flattered uh Flutter's Peter Jackson and people, they reiterate constantly on earnings calls that their main focus is still on state regulated sports betting. They think that's where the money is and that's where the major innovation is and that is kind of like the core to their business. It's been very clear, I think, that with Fanjul and DraftKings, this prediction market stuff, while there is no firm ruling on what is and isn't allowed with sports, it kind of makes sense for people like Fanjul and DraftKings to rush into that gap. Suddenly you can offer sports in California and Texas and Georgia and Florida where they're shut out by the Seminole monopoly. um It's a huge add on for them, right? It greatly expands their sports business. And if there is no firm ruling saying you can't do this, why would they not do it? I guess at this point, um obviously, the courts eventually land on this dictates not only what companies like Fandual and DraftKings do next, but kind of dictates, like, you know, whether we need to reassess the whole notion of sports betting regulation, really. Like I said, I think it's a pretty it's a pretty impossibly broad question to try and sum up, I think. Yeah, you bring up a great point, Tom, with how the other states that don't have regulated gambling will react to this, because I know for a fact this is a huge opportunity for a lot of these operators. who are entering these markets for the very first time with this product. And it's giving a lot of momentum to what they've already built in in regulated gaming states. So whatever the rule is, we'll have some major implications to how rulemaking will be sorted out nationwide and how regulations are implemented nationwide as well. And of course, right now the lines are pretty blurry. And Tom, you of course. um We're making an effort not to call sports betting or not call prediction markets sports betting, even though they're pretty much are. But do you think uh we could see um with a federally regulated market for event contracts, do you think they could become a parallel product category competing directly with traditional sports books? Yeah, it's interesting because If you look at. The framework of both products of event contract trading and sports betting, like we've been saying this whole discussion, there are similarities, but there are differences. And I think a area that could help separate this thing is the ability to trade event contracts on politics and not just sports. I think that opens up a whole new gambit of issues or a whole new gambit of opportunity. So that's what they'll be something that's interesting because this discussion that we're having right now back and forth between courts is solely focused on sports event contracts. Now, there could be a point where we move over to political contracts, and that has raised concerns as well as of late because of insider trading concerns. But with sports betting, there is opportunity for this to compete. But if you add in politics and entertainment. there is a way for EVIC contract trading to kind of gain an edge. think that's a fair point, right? thing is, we're still, you got to bear in mind, we're still so early with this. Like it wasn't even that long, you know, like it was, when was it? Sort of October 2024, I think, like back end of 2024 that we were talking about, Cauchy's like election contracts. And that was the big deal. And that was the thing. You know, the sports event contracts are literally a year old. slightly more than a year old. I crypto were first to launch them and then Caoshi got involved about this time last year, something like that. This is still so early and you've got to look at, even if you just look at the sports side, it's very interesting hearing a reference like DraftKings and Fangil and stuff, their CEOs have said what they will keep repeating and okay, there's a certain amount of posturing and politics. They don't always exactly say what they mean, I would suggest, but what I do think they say that is kind of fair is that as it stands right now, On prediction markets, it's quite hard to replicate the depth and the variety of sports betting offerings. Like if you go on a leading sports book right now, there are so many options available to you, like custom same game parlays and just the in-play betting and the depth of the betting experience, I think currently is really hard to replicate on prediction markets. But like we said, sports event contracts are a year old. Assuming that we don't have any firm ruling from the court, in like a year's time or the end of 2026, who knows what will be available on prediction markets. We've already seen them expanding into kind of parlay and player prop style stuff when before it was just single games and futures. This stuff is moving at such a fast pace that I think it's really hard to equate the two, which again is why it makes so much sense for Fanjul and DraftKings to be offering both things at once. It's going to be really fascinating honestly to see how it develops over the coming months. Hashtag wait and see. Yep, I'm throwing that out there again. So it's going to be fascinating for sure. And like I said, make sure you subscribe to all SVC media newsletters to stay up to date with this. And speaking of that, what are you guys going to keep an eye out for during the coverage of this case in particular and prediction markets in general uh in the coming weeks? I know from my side, we've got some oral arguments coming up in April. I know that's a little far out from now, but that will be a huge moment in this timeline of prediction markets in this legal dispute that we're having. I know there's been a request, a legal request for the oral arguments to be consolidated into one. So we'll see if that goes through or not. But that's that's a moment I'm really kind of looking for. And I think we'll We'll kind of gauge where we're heading. Yeah, I would say, you know, like we talked a lot about Nevada, the Nevada case here, understandably. But I mean, there are a couple of other key battlegrounds as well. Massachusetts, think Maryland. There's a lot going on right now. I think the biggest thing right now in the short term, you know, it makes me laugh. So Justin's right. Talking about oral arguments in April. Goodness knows what's going to happen in the next two months before we get to that point, you know, but what's going to, you know, I think the most the short term, the most interesting thing potentially one of the most decisive things is CFTC, Michael Selig said, we are willing to intervene on court cases. Now they have done for the first time by filing that kind friend of the court brief in the crypto case. What else is the CFTC going to do in the coming weeks? How far are they under Selig? How far are they willing to push the envelope? It's going to be really interesting to see how many steps they're willing to take, I guess, in terms of cases that are currently open, litigation that might, other litigation that might come up. know that Nevada has just filed a civil enforcement action against Kalshi in state court after Kalshi sued Nevada in federal court. This is the kind of thing that we're working with, right? So we're just going to grab an oar and try and keep on paddling and stay afloat as this news continues to hit us in the face. We'll definitely be taking those hits in the face for you guys, processing all the information and reporting back to you through SBC media newsletters and of course iGaming Daily. So make sure you are not only subscribed to the newsletters but also following iGaming Daily on all social media platforms and your preferred podcasting platforms so you can keep up to date with what happens with what is happening in the US and all across the world in the iGaming segment. Tom, Justin, thank you very much, it's been very insightful and very interesting to hear from you guys on this case. Thank you very much, Nia MacDonald, for producing this episode. I'm Fernando Nutt, and to our listeners out there, we'll see you in the next one. Goodbye.