G2E Las Vegas: Casino Giants Warn Against Unregulated Prediction Markets

The Global Gaming Expo (G2E) in Las Vegas sent a clear message to the global gambling world this year. Top executives from the largest casino corporations made it clear that while the classic mecca of gambling has regained its old strength, it faces new digital threats. Craig Billings of Wynn Resorts, Bill Hornbuckle of MGM Resorts International, and Tom Reeg of Caesars Entertainment emphasized on the main stage that Las Vegas remains the epicenter of the industry, even as challenges become more complex.

Tom Reeg explained that the industry has returned to normal seasonality following a turbulent post-pandemic period marked by bubbles in regional and destination markets. Despite jarring moments where occupancy hit 98 percent, the rhythm has now stabilized at pre-pandemic levels. However, while physical casinos are stabilizing, a new phenomenon is causing heated debate: prediction markets such as Kalshi and Polymarket.

Numbers and facts

The economic importance of the regulated US gaming industry is immense. Bill Miller, President and CEO of the American Gaming Association (AGA), supported this in his keynote address with impressive figures. The industry supports 1.8 million jobs, pays 53 billion US dollars in taxes for schools and infrastructure, and generates 329 billion US dollars in economic growth. In stark contrast are the prediction markets. According to Miller, the provider Kalshi alone has handled more than 190 billion US dollars in sports betting while paying zero dollars in taxes.

"We come in through the front door. We follow state laws. We respect regulations. We honor tribal sovereignty. We pay taxes. We champion responsible gaming. And we build opportunities for long-term prosperity." - Bill Miller, President and CEO of the American Gaming Association (AGA)

It is viewed particularly critically that these platforms specifically target 18 to 21 year olds. They are suggested that betting on election results or sporting events is a legitimate investment strategy, comparable to the stock market. Miller mockingly referred to the operators as cashmere hoodie bros from Brooklyn who merely employ an army of lawyers to deal with their legal messes instead of creating real jobs.

Background

The opposition of large casino operators to these new markets is not only ideological but also strategic. Bill Hornbuckle of MGM revealed that his company was approached about entering the prediction market fray. However, MGM declined because doing so could jeopardize valuable gaming licenses in Nevada, Japan, and Macau. There have to be principles to all of this, he said. It is obscene that in areas like Utah, where the culture wants nothing to do with gambling, 18 year olds can bet.

"What I worry about is that something awful is going to happen in this interim period, because of the lack of regulation and oversight, that’s going to tar all of us, whether we’re operating in the regulated markets or in predictions." - Tom Reeg, CEO of Caesars Entertainment

Craig Billings of Wynn Resorts added that while they do not take a political position as they have no direct skin in the game, the indirect impacts over time are certainly felt. The debate is expected to end up in the Supreme Court, as prediction market providers have already lost numerous court cases.

Why it matters for German players

For German players, this debate is a call for caution. In Germany, the market is strictly regulated by the State Treaty on Gambling 2021 (GlüStV 2021). Anyone playing with providers that do not have a license from the Joint Gaming Authority of the States (GGL) enters a legal gray area similar to users of prediction markets in the USA. In Germany, the deposit limit of 1,000 euros per month and the stake limit of 1 euro per spin on virtual slots ensure a high level of player protection. These rules do not exist with unregulated providers, which massively increases the risk of gambling addiction and financial loss.

The LUGAS system also ensures that players cannot be active with several providers at the same time. Anyone using platforms that, like Kalshi or Polymarket, operate without a German license has no legal certainty regarding the payout of winnings. In Germany, only providers on the official GGL whitelist may be advertised and used to ensure that taxes are paid and player protection is guaranteed.

What it means for GGL-licensed casinos

Licensed German online casinos are in direct competition with the black market. The current discussion in Las Vegas shows that this problem exists globally. GGL-licensed providers must clear high hurdles in terms of security and transparency, while illegal competitors operate without these burdens. This underlines the need for consistent prosecution of illegal offers by the authorities. Only if the legal market is protected can fair conditions prevail that benefit both companies and players in the long term.