‘This is an all-out war’: Inside the casino industry’s fight to stop prediction markets
This Is an All-Out War: Casinos vs. Prediction Markets
Activelifezero.com – This is an all-out war, and the Ninth Circuit Court of Appeals just handed the casino industry its most powerful weapon yet. In a unanimous ruling issued Friday, the federal appellate panel affirmed that states may classify prediction markets as gambling, validating the position of Nevada regulators and a bloc of Las Vegas casino operators. The decision closes out a summer defined by escalating legal battles between the gaming establishment and fast-growing platforms such as Kalshi and Polymarket, which have scaled from niche betting experiments into multibillion-dollar venues trading on sports results, election outcomes, cultural milestones, and even daily weather patterns.
A Hostile Strip and a New Culprit
Las Vegas has weathered a brutal stretch this year. Temperatures along the Strip have repeatedly breached 115 degrees Fahrenheit, and foot traffic has declined amid a wider tourism slump that analysts trace largely to consumer cost pressures eroding discretionary spending. Yet the casino establishment has zeroed in on a different explanation: the meteoric rise of prediction markets, which structure themselves to bypass state gaming boards altogether.
Backed implicitly by the Trump administration, these platforms register as financial trading venues rather than casinos or sportsbooks. They secure licenses from a relatively obscure federal commodity regulator to issue so-called “event contracts.” The fiscal consequence is stark: prediction companies sidestep the gambling taxes that delivered roughly $18 billion in state revenue last year. For jurisdictions that rely on gaming levies to fund schools, highways, and other public services, that gap constitutes a direct fiscal wound.
Mobilizing the Lobby
Nearly two dozen sources familiar with internal industry strategy describe a coordinated campaign that sharpened dramatically over the summer. Casino operators have become the central engine in a nationwide effort to constrain prediction markets, running litigation, lobbying, and public messaging in parallel.
Derek Stevens, who owns three Las Vegas casinos and runs Circa Sports with sportsbooks in seven states, has emerged as one of the loudest voices on the casino side.
“A couple nerds came up with this idea to avoid paying taxes,” Stevens said. “Just because they’re shrewd doesn’t mean they should be exempt from the law. These are thieves. They’re pirates. They’re marauders.”
The casino-backed lawsuit that produced the Ninth Circuit victory stands as the most consequential courtroom win yet for opponents of prediction markets. Earlier in the summer, federal judges in jurisdictions spanning Connecticut to Wisconsin issued rulings against prediction sites, citing precedents rooted in the Nevada litigation. In Washington, lawmakers introduced five new bipartisan bills this summer aimed at limiting the industry, joining more than a dozen other proposals already pending in Congress.
The Counter-Narrative
Advocates of prediction markets contend that the casino lobby is recycling a playbook it has deployed against every successive innovation in gaming, from tribal casinos to online poker. Former Nevada Senator Dean Heller, a Republican who now serves as a paid adviser to Kalshi, framed the dispute in familiar industry terms.
“This is the game that’s played, and I’ve been part of that game for 30 years,” Heller said. “This is no different than what we’ve seen. It’s how gaming responds to competition. They don’t like it. They want to have a monopoly.”
Kalshi employees have been active on social media attempting to flatten the narrative, suggesting that anyone opposing prediction platforms is simply following the casino lobby’s script. The well-funded gaming industry has poured more than $3.3 million into federal lobbying this year alone. Yet the regulatory pressure extends well beyond casino interests: forty-four of fifty state attorneys general, dozens of Indian tribes, consumer-protection advocates, addiction specialists, and a growing bipartisan bloc on Capitol Hill all favor tighter oversight of prediction markets.
Taxation and Broader Stakes
A Kalshi spokesperson told reporters that the company pays state taxes like any other business and pointed to North Carolina, which enacted a 6 percent tax on prediction platforms that the company described as respecting federal law while funding critical state services. Polymarket declined to comment. In response to Stevens’s colorful language, a source close to the company offered a pointed retort:
“If the gambling lobby is resorting to name-calling, that tells you this is really starting to hurt their wallets.”
Frequently Asked Questions
What did the Ninth Circuit actually decide?
The panel ruled unanimously that states retain the authority to treat prediction markets as forms of gambling. The decision sided with Nevada state officials and Las Vegas casino operators, giving them a powerful appellate precedent to enforce state-level regulation of platforms like Kalshi and Polymarket.
Why don’t prediction markets pay gambling taxes?
These platforms are structured as financial trading venues licensed by a federal commodity regulator to issue “event contracts,” rather than as casinos or sportsbooks regulated by state gaming boards. That classification means they do not remit the gambling taxes that generated approximately $18 billion in state revenue last year.
How much money is the gaming industry spending on lobbying?
The gaming industry has poured more than $3.3 million into federal lobbying this year alone, part of a broader coordinated campaign combining litigation, lobbying, and public messaging to constrain prediction markets.
Who supports tighter regulation of prediction markets?
Forty-four of fifty state attorneys general, dozens of Indian tribes, consumer-protection advocates, addiction specialists, and a bipartisan bloc of lawmakers on Capitol Hill all favor tighter oversight. Five new bipartisan bills were introduced in Washington this summer, joining more than a dozen other pending proposals.
