As Bill Hornbuckle made his way to Atlantic City this week for a major gaming industry conference, the legal sports betting landscape in the U.S. approached a critical turning point.
Just days earlier, prediction market platform Kalshi reported $86 million in handle during The Masters tournament—approximately three times the volume it recorded for the Super Bowl. In recent weeks, Kalshi and other prediction markets have faced a surge of cease-and-desist orders from states across the country. This legal pressure coincides with the U.S. Commodity Futures Trading Commission’s (CFTC) upcoming roundtable on the regulatory future of sports event contracts.
With no taxes levied on trading revenues, these prediction markets are increasingly viewed by some industry lobbyists as a direct threat to the regulated gaming sector. Speaking on a keynote panel at the East Coast Gaming Congress in Atlantic City on Tuesday, MGM Resorts CEO Bill Hornbuckle addressed the issue.
“If we don’t handle this correctly, it could become the very foundation for federal intervention in the gambling space,” Hornbuckle told iGB on the sidelines of the conference.
Federalism vs. States’ Rights
It has been nearly seven years since the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), effectively clearing the way for legalized sports betting across the nation. The court ruled that PASPA violated the 10th Amendment’s anti-commandeering doctrine by preventing states from authorizing sports betting.
Writing for the majority, Justice Samuel Alito emphasized that PASPA unconstitutionally dictated state legislative actions. He underscored the threat to state sovereignty, posing a hypothetical in which federal officers could be stationed in state legislatures to block votes on certain measures.
“A more direct affront to state sovereignty is not easy to imagine,” Alito wrote.