Caesars Digital president Eric Hession says prediction markets could push more U.S. states toward legal online casino. Lawmakers may act if they see gambling revenue moving to products outside state gaming systems.
Hession made the comments as prediction markets remain in legal fights with state regulators. The debate has grown as platforms such as Kalshi and Polymarket expand sports-related event contracts.
States may look at lost tax revenue
Prediction markets are creating new pressure for state governments. If residents can access event contracts that look similar to betting, lawmakers may ask why online casino remains illegal.
Tax revenue is central to that argument. Legal iGaming gives states a regulated way to collect money from online casino play, while prediction markets may operate under federal rules or outside traditional gambling licences.
For casino operators, iGaming also helps existing licence holders compete in digital gambling. Caesars already operates online casino products in states where the vertical is legal.
Prediction markets remain contested
Prediction market operators present event contracts as financial products regulated under federal derivatives law. State regulators have challenged that view when contracts involve sports outcomes.
The main dispute is whether contracts linked to game results or player performances should be treated like sports betting. Several states have sent enforcement letters or filed lawsuits against prediction market companies.
Courts have not produced one settled national answer. Operators, investors and regulators are still watching for rulings that could shape sports prediction market growth.
Caesars waits for legal clarity
Caesars has taken a cautious approach to prediction markets. The company has not moved into event contracts while legal and regulatory questions remain unresolved.
Clarity will come at some point, and Caesars can compete well once the rules are settled. Entering too early could create licensing risk for casino operators. That risk is higher in states where they already run casinos or sportsbooks.
The issue is especially sensitive for companies with land-based casino licences. State regulators can review operator conduct beyond one product line.
iGaming debate could widen
Only a small group of U.S. states currently allow full online casino gaming. New Jersey, Pennsylvania, Michigan, Connecticut, West Virginia, Delaware and Rhode Island have legal iGaming markets. Prediction markets could give budget-focused states another reason to revisit iGaming. Lawmakers may compare unlicensed or federally regulated event products with a state-licensed online casino model that includes tax revenue, age checks and responsible gambling controls.
