BetMGM CEO Says CFTC Actions Leave Prediction Markets at Legal Risk

BetMGM CEO Adam Greenblatt said the Commodity Futures Trading Commission’s latest actions leave prediction markets exposed to legal challenges, as federal appeals courts disagree over states’ authority to regulate sports contracts.

On BetMGM’s third-quarter business update call Tuesday, Oct. 13, Greenblatt described the current approach as “cosmetics in pursuit of survival.” He said he expects the Supreme Court to favor states and hopes for an outcome during the Court’s 2026-27 term. He also warned that casino-like products could reappear in another form if prediction markets survive the legal challenges.

The CFTC took two separate steps Friday, Oct. 9. An interim final rule excludes sportsbook wagers, casino games and other casino-style products from the federal definition of a swap. The rule is set to take effect upon publication in the Federal Register, with comments due within 30 days after publication.

In a separate proposal, the CFTC would classify event contracts tied to sports, politics, cultural events and weather as swaps. The proposal asserts the agency’s exclusive jurisdiction over those contracts. Comments are due 30 days after the proposal’s Federal Register publication.

The dispute centers on whether sports contracts traded on federally registered prediction exchanges count as swaps under commodities law and whether federal authority limits states’ ability to enforce gambling rules. On April 6, the Third Circuit upheld preliminary relief for Kalshi against New Jersey. The Ninth Circuit ruled Aug. 28 that Kalshi had not shown Nevada’s gambling rules were likely preempted as applied to its sports contracts. On Sept. 25, the Sixth Circuit found the contracts were not swaps and federal law did not preempt gambling laws in Ohio or Tennessee.

The rulings produced different outcomes at the preliminary-injunction stage, leaving the jurisdictional question unsettled. An earlier review of the CFTC measures and court rulings outlined the competing decisions.

New Jersey filed its petition for Supreme Court review on Sept. 2. The Court granted Kalshi an extension to respond, setting a Nov. 9 deadline, but has not agreed to hear the case.

BetMGM reported third-quarter net revenue of $710 million, up 7% year over year, and adjusted EBITDA of $86 million.