No props?
CFTC advisory casts a shadow over prop betting
The CFTC attempt to set prediction rules doesn’t provide total clarity.
In +More: Eden Hazard in hot water over Stake promotion.
Castro reassures Nevada over Resorts World.
Attorneys general make the case that predictions = gambling.
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Prop the question
You know the rules: The Commodity Futures Trading Commission’s move to set out the terms of engagement on sports prediction markets appears at first blush to throw a shadow on the possibility of prop bets.
I’m considering the situation: In a detailed staff advisory document from the Division of Market Oversight (DMO), the CFTC said DCMs are “encouraged to consider whether certain categories of event contracts create a heightened potential for manipulation or price distortion.”
It added that this includes contracts that “resolve or settle based on injuries to individual sports participants, unsportsmanlike conduct, or physical altercations between sports participants.”
It also referred to “contracts that resolve or settle based on the action of a single individual or a small group of individuals.”
Moreover, the advisory also said markets should cover an “extended period of play.”
Know your limits: Reacting to the publication of the advisory, the analysts at Stifel said the guidance “suggests likely restrictions to prop betting.” “While still under public commentary period, initial guidance seems to indicate prediction exchanges won’t be allowed to offer player props,” the team added.
“We see this as a meaningful product limitation versus regulated sportsbooks, as player props anecdotally account for 30%-plus of wagers for NFL and the vast majority of high-margin SGP bets include at least one prop leg.”
The team noted the restrictions on “manipulatable bets” would have wider ranging consequences for the breadth of prediction markets offerings, such as mention markets.
This could “potentially” impact long-term adoption.
Horse and cart: However, speaking to C+M, Chris Grove, partner at Acies, cautioned that the sector should beware reading too much into the advisory.
“I wouldn’t jump to any conclusions about prop betting being banned,” he said.
“There’s so much room for interpretation in the statement that you could drive not just a truck but whatever armada of vehicles you might choose right on through.”
“I’m not sure the initial guidance confirms much of anything,” he added. “I’m wait and see on this one.”
Official stamp: More certainty would appear to surround the need for prediction markets providers to use official data provided by the leagues via their official data providers. The DMO staff advisory “recommends” DCMs take four specific steps when listing sports-related event contracts:
They must engage in pre-certification communications with relevant sports governing bodies when developing terms and compliance programs.
They need to include in the self-certified product submission an explanation of whether the contract is consistent with the relevant league’s integrity standards.
They must establish information-sharing and data arrangements with the relevant sports integrity monitoring organization.
And they will need to rely on official data provided by the relevant league or governing body as the settlement source.
Until now, exchanges, including Kalshi and Polymarket, have largely resisted paying league fees for official data or entering into integrity partnerships, treating such arrangements as commercially unattractive given their margin structures.
The advisory changes the calculus significantly. While technically non-binding, the DMO’s guidance suggests proactive engagement with sports leagues or governing bodies may reduce the likelihood of CFTC action.
As Dorothy DeWittt, a former CFTC director and now a consultant, said on LinkedIn: “Sports integrity is now a compliance function.”
Door ajar: The data provider angle here is significant. Only a small number of leagues have entered commercial arrangements with exchanges to date, the MLS and NHL among them. The advisory is seen by equity analysts as likely to accelerate league engagement.
This would open the door to enable sports-data providers to monetize official league data to exchanges for settlement purposes and to market-makers for in-play trading.
It is a revenue stream that currently sits outside most forecasts for the sports-data sector.
One open question the rulemaking process will need to resolve is margin trading. Currently, event contracts are fully collateralized, which constrains liquidity, particularly for non-core markets and low-odds multi-leg wagers.
The CFTC is seeking public input on whether prediction markets should be permitted to offer trading on margin.
If so, it asks what disclosures and margin calculation methods should apply, particularly with respect to retail versus institutional customers.
What happens next? The proposed rulemaking now enters a 45-day public comment period following Federal Register publication. The comment process will help shape final rules on the gaming/gambling definitional question, margin trading and the treatment of insider information.
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+More
Virginia: The legislature has approved the regulation of distributed skill gaming machines and the bill now heads for the governor’s signature. The bill caps total machines at 35k, with a maximum of four machines per location and revenue taxed at 25%. The bill notes the machines must have a skill component that is material to the outcome, which the analysts at Stifel suggested might mean that current Pace-O-Matic mechanics may not qualify.
New Jersey: Momentum is growing among developers and politicians to legalize casinos in northern New Jersey, driven by fears of losing gambling revenue to three new casinos being built in New York City. Racetrack owners at the Meadowlands and Monmouth Park are lobbying for a constitutional referendum, potentially as soon as November. However, the effort faces fierce opposition from South Jersey leaders protective of Atlantic City.
Hazard signals: Belgium’s Gaming Commission has opened an investigation into former football star Eden Hazard after he became a global brand ambassador for Stake, an online gambling operator not licensed in the country. Advertising illegal gambling services to Belgians is prohibited, and if his campaign is found to target a Belgian audience Hazard could face fines of up to €700,000.
Meanwhile, in the Netherlands opposition parties ChristenUnie and the Socialist Party are pushing for a complete ban on gambling ads and tougher self-exclusion rules. They are also calling for dramatically higher penalties for rule-breaking operators, potentially up to 100% of annual revenue, versus the current 10% cap.
Philippines: PAGCOR has begun actively enforcing its new B2B accreditation regime across the country’s online gaming sector, with regulators now using operator supply chains to ensure compliance ahead of a March 31 deadline for suppliers. PAGCOR is requiring operators and gaming system administrators to confirm that all third-party vendors in their ecosystems are either accredited or demonstrably progressing through the accreditation process.
Last Resorts
Culture club: A top executive with Resorts World Las Vegas has reassured the Nevada Gaming Control Board (NGCB) that its compliance issues are in the past and the casino is now focused on a “culture of compliance.”
Carlos Castro, president and CFO of Resorts World, was recommended for licensure last Thursday (March 12) by the NGCB on the second day of a two-day meeting.
The Nevada Gaming Commission (NGC) will consider final approval on March 26.
Water under the bridge: Castro was appointed to his position in February 2025. “A lot has happened over the last year, and it has been driven by the board,” Castro told the three-man board.
“We started very quickly in terms of my assessment, our assessment of the business and really starting with a culture of compliance,” he said.
“Really it is compliance over commerce.”
Getting to know you: Castro told the board that Resorts World has strengthened its know-your-customer program to prevent money laundering by illegal bookmakers, which led to the resort agreeing to a $10.5m fine in March 2025 for violating anti-money laundering laws.
The fine was only second to the $20m fine paid by Wynn Resorts in February 2019.
That penalty covered a 10-count complaint over allegations of sexual harassment and misconduct by former chair Steve Wynn.
Wynn, who has denied the allegations, agreed to a $10m fine in July 2023, which was the largest ever in Nevada against an individual licensee.
Castro added that the resort’s board, which includes former Republican Nevada Gov. Brian Sandoval and former NGCB chair AG Burnett, have initiated new procedures to prevent customers from gambling at the Las Vegas property.
“It’s knowing who we’re going to do business with, and if they don’t meet those certain criteria they don’t get an opportunity to gamble with us,” Castro said.
“They are either placed on a gaming ban or if it is egregious it’s a full property ban.”
Most of the illegal activity took place while Scott Sibella was president of Resorts World Las Vegas. He was fired in September 2023.
Black list: The NGC recently added illegal bookmaker Wayne Nix as the 38th person on Nevada’s List of Excluded Persons, also known as the ‘Black Book’. Mathew Bowyer has also been nominated for inclusion on the list.
Both Nix and Bowyer were involved in money laundering at three Las Vegas casinos, including Resorts World.
“I’ve strived to build a leadership team for compliance first. It is a very clear directive from the board. If you can’t get on board with that, there is not a place for you here at Resorts World.”
Castro assured the board that they’ve completely broken down the silos, with casino marketing, operations and surveillance all speaking openly with compliance.
“If there is any question, you need to bring it to compliance,” Castro said.
State prediction market scrap
Turf on fire: Speaking at the ABA annual white-collar crime gathering in San Diego last Wednesday, California Attorney General Rob Bonta and Illinois Attorney General Kwame Raoul both said they believe the likes of Kalshi and Polymarket should be considered gambling and regulated as such.
“Our position on prediction markets is that we are exerting our sovereign power to regulate gambling,” Bonta said. “Right now, we are fighting to protect that authority, state authority. We are fighting to make sure it exists and to reassert a power we believe we have.”
Earlier this year, California joined a coalition of states and tribal organizations to argue that the platforms were circumventing gambling laws by using the cover of the Commodity Exchange Act and federal regulation by the Commodity Futures Trading Commission (CFTC).
“The CFTC doesn’t regulate gaming,” said Raoul. “That has been left primarily to the states. The Illinois Gaming Board’s domain is to regulate gaming, and that is no longer restricted to brick-and-mortar casinos, while Illinois has not yet embraced online gaming. [Prediction markets are] gaming, and to the extent you’re not licensed, it is illegal.”
He said Illinois did not go along with theories that predictive markets are “green lit” to be regulated by the CFTC under banking laws such as the Dodd-Frank Act. “We don’t believe the language,” he said. “There is the history of regulation by the states. It’s within our domain to regulate.”
I see it coming: Earlier this week, Springfield State Senator Michael Hastings called for legislation specifically to address prediction platforms.
He said the platforms avoid “the licensing and oversight required of regulated gambling operators in Illinois.”
“These platforms are taking real money and allowing users to bet on outcomes just like a sportsbook,” said Hastings. “If you are operating like a gambling entity, taking wagers and profiting from those bets, then you should be subject to the same rules and consumer protections as every other gambling operator in Illinois.”
Senate Bill 4168 proposed that platforms offering speculative contracts on future events may fall under Illinois gambling law if they function like betting operations.
Illinois reps said Polymarket had raked in billions of dollars from allowing users to speculate on events ranging from elections and sports outcomes to geopolitical conflicts and economic developments, which it considered gaming.
Shut up and explode: In recent weeks, Polymarket and Kalshi have drawn scorn for their controversial markets allowing users to wager on the outcomes of war and the detonation of nuclear weapons.
Hastings said that allowing speculation on catastrophic scenarios “underscores the need for clear oversight.”
He said legislation would ensure that prediction platforms could not operate outside those safeguards if they are effectively taking bets from Illinois residents.
“You cannot allow platforms to take wagers on everything from elections to potential global disasters and then claim they are not operating as gambling businesses,” he said. “Illinois has a well-regulated gaming industry where operators follow strict rules. We should not allow unlicensed platforms to profit from our residents while avoiding those same standards.”
Hastings will work to advance this legislation in the coming weeks.
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2026 Mal-teaser
In the frame: The Malta Gaming Authority’s ‘Regulatory Oversight: Supervisory Engagement Efforts 2026’ document outlines the regulator’s key priorities for supervising the sector in the year ahead with a strong emphasis on financial integrity, emerging technologies and sports-betting risks.
The MGA said its oversight programme for 2026 will build on the “risk-based, evidence-led, and outcomes-focused oversight framework” introduced in 2025.
It said it would continue to utilize data-driven insights and targeted supervisory engagements to address emerging regulatory risks.
Scope for the best: A central pillar of the authority’s oversight strategy will remain full-scope external compliance audits carried out by authorized audit service providers.
These reviews examine areas such as financial stability, anti-money laundering controls, IT systems and player protection practices.
The MGA describes them as “a pivotal component” of its oversight framework.
Among the specific supervisory priorities, the MGA identified controls around the use of crypto assets in online gaming, esports betting markets and athletes betting on their own sport as being key issues.
Financial crime risk mitigation is expected to be a major theme of the regulator’s work. The MGA said it will review how operators manage cash-based payment risks, noting that such methods “present a heightened risk due to their inherent anonymity, as they can obscure the source and destination of funds.”
Similarly, the regulator will conduct a thematic review of crypto usage in gambling operations.
It cited the “significant elements of anonymity and transferability” associated with digital assets and the challenges they pose for transaction monitoring and regulatory oversight.
Good sport: Integrity in sports betting is another major focus. The MGA said it will examine risks linked to athletes wagering on their own sport and will conduct a targeted review of esports markets, a “rapidly developing activity” where integrity vulnerabilities may arise.
Calendar
Apr 28-29: Ethical Gambling Forum 2026, Leeds
May 26-28: Gambling & Risk Taking Conference, Las Vegas
Jun 4: Gaming in Holland, Amsterdam
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