CFTC regulation news and updates

CFTC Regulation Moves Criticized

BetMGM CEO Adam Greenblatt has called the CFTC's latest moves to regulate casino-style products 'cosmetics in pursuit of survival'.

Greenblatt made the comments on BetMGM's third-quarter earnings call, addressing the CFTC's October 9 rule changes.

Prediction Markets and Casino-Style Products

The CFTC's interim final rule codifies the agency's position that casino-style gambling products fall outside the definition of a swap.

However, Greenblatt believes that the risk from prediction markets has not been removed, saying 'I think if anything, the risk has been stayed for some time.'

Supreme Court Ruling Expected

Greenblatt expects the Supreme Court to side with states and tribes during its 2026-27 term, saying 'I think the key test is whether this was the intent of Congress, and I think that will be shown to not be the case'.

The CFTC's rule changes come as sports trading on prediction markets surges, with sports and combo volume on the exchanges rising about 72% to $68.2 billion in the 30 days to September 29.

BetMGM's Q3 Results

BetMGM reported Q3 net revenue of $710 million, up 7% from a year earlier, and adjusted EBITDA of $86 million, up 112%.

Average monthly active players fell 3%, while iGaming brought in $483 million of the quarter's revenue.

Competitive Environment

Greenblatt said on the call that the competitive environment 'remains intense, particularly due to investment by unregulated and illegal operators offering sports betting'.

• Sports and combo volume on the exchanges rose about 72% to $68.2 billion in the 30 days to September 29.
• Two federal appeals courts have sided with states since August, most recently the Sixth Circuit.
• The Sixth Circuit ruled on September 25 that Ohio and Tennessee can enforce their gambling laws against Kalshi.

Adam Greenblatt expects the legal uncertainty to be settled by the Supreme Court, saying that most cases so far have gone in favor of states, attorneys general, and tribes.

The results come as BetMGM is 'reducing investment in certain lower-return, OSB-only markets', meaning states where it offers online sports betting but not online casino games, and putting more into iGaming.

Background and Timeline

The CFTC's rule changes are part of a larger effort to regulate the rapidly growing sports betting industry in the United States.

In recent years, several states have legalized sports betting, and the industry has seen significant growth, with many operators offering online sports betting and casino games.

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However, the industry has also faced challenges, including regulatory uncertainty and competition from unregulated and illegal operators.

Expert Perspective

According to experts, the CFTC's rule changes are a positive step towards regulating the industry, but more needs to be done to address the risks associated with prediction markets and casino-style products.

'The CFTC's rule changes are a good start, but they do not go far enough in addressing the risks associated with prediction markets and casino-style products,' said one expert.

'More needs to be done to ensure that these products are regulated in a way that protects consumers and prevents illegal activity,' the expert added.

Implications for Readers in India

The CFTC's rule changes may have implications for readers in India, particularly those who are interested in sports betting and online gaming.

While the CFTC's rules only apply to the United States, they may set a precedent for other countries, including India, to regulate their own sports betting and online gaming industries.

Readers in India should be aware of the regulatory environment in their own country and the potential risks associated with sports betting and online gaming.

What to Watch Next

Readers should watch for further developments in the CFTC's regulation of the sports betting industry, including any potential Supreme Court rulings.

Additionally, readers should be aware of any changes to the regulatory environment in their own country and the potential implications for the sports betting and online gaming industries.

• The Supreme Court's ruling on the CFTC's regulation of prediction markets and casino-style products.
• Any changes to the regulatory environment in India and other countries.
• The growth and development of the sports betting and online gaming industries in the United States and globally.