Caesars Says ‘No’ to Prediction Markets…For Now

• CEO Reeg says prediction markets are gambling
• Says company won’t participate in the industry in the current regulatory environment
• He’s open to it down the road if more regulatory clarity emerges

Count Caesars Entertainment (NASDAQ: CZR) as a “no” and a hard one at that when it comes to possible near-term entry into the prediction markets arena, but that may also be a temporary state of mind for the casino giant.

On the company’s fourth-quarter earnings conference call Tuesday afternoon, prediction markets were, not surprisingly, a topic of discussion. CEO Tom Reeg made clear that Caesars views prediction markets as another form of wagering, adding that the company isn’t willing to risk its land-based casino licenses to enter the industry.

In the current regulatory environment, you shouldn’t expect us to be participating in prediction markets,” said Reeg on the call. “Some of our most valuable assets are our gaming licenses in each of the states that we operate, and it’s been made clear to us in a number of states that if we pursue that avenue, some of our bricks-and-mortar licenses could be at risk. You shouldn’t expect us to do that.”

Across the US, states are warning licensed sportsbook operators, of which Caesars is one in many jurisdictions, that those permits could be jeopardized if companies push into event contracts.

Caesars Smart to Avoid to Prediction Markets

While the prediction markets industry is rapidly growing, a compelling case can be made that Caesars is smart for staying away for now.

That’s another internet casino surprise and a pleasant one at that given Virginia’s population. Caesars runs a brick-and-mortar casino there, implying it’d be in prime position to land an iGaming permit should Gov. Abigail Spanberger (D) sign related legislation into law.

Combine the Maine and potential Virginia iGaming surprises and it’s not a stretch to say that over the near-term, prediction markets entry represents more risk than reward for Caesars.

Caesars Prediction Markets Door Slightly Ajar

Notably, Caesars isn’t permanently closed off to the idea of participating in the prediction markets space.

“But notwithstanding, if there becomes clarity that there is a legal path for prediction markets that satisfies regulators on the brick-and-mortar side, we will find a way to participate,” said Reeg on the earnings conference call.

The Caesars chief executive officer also reiterated his view that prediction markets are undoubtedly a form of wagering.

“But I would tell you, unequivocally, we view this as gambling that should not be regulated,” he noted. “These are not swaps. They’re not miraculously finding the other side of a 5-team parlay at the same time one side comes in, but we’ll let that play out through the courts.”