Louisiana Rules Sports Prediction Markets Illegal

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Louisiana Rules Sports Prediction Markets Illegal

Louisiana lawmakers are sending a strong warning to operators planning sports prediction markets in the state. 

The warning comes amid growing concerns over gambling legality and regulatory compliance. Lawmakers emphasized that these platforms could violate existing state laws, potentially putting operators at risk of enforcement action.

Louisiana Legislators Warn Licensees About Prediction Markets

Louisiana legislators have informed licensees that initiatives to operate prediction markets in the state do not comply with existing gaming laws. The Louisiana Gaming Control Board (LGCB) has made it clear that these markets are considered illegal gambling under state law. 

The statement highlights that prediction markets allow individuals to wager on outcomes of sporting events, which falls outside permitted activities.

This action makes Louisiana the latest state attempting to block sports prediction markets from operating within its jurisdiction. Other US states concerned about unregulated gambling and its potential risks to consumers did similar efforts.

Lawmakers have indicated that operators must fully adhere to the Louisiana gambling framework if they want to avoid penalties.

Online Sportsbooks Must Obtain Licenses to Operate Prediction Markets

Operators of online sportsbooks planning to offer prediction market contracts must hold a valid sports wagering gaming license. The LGCB recently issued a letter clarifying its rules for sports wagering and event contracts.

“No person or entity may offer, accept, facilitate or in any way enable sports wagering in Louisiana unless the activity is conducted by a licensed or permitted operator through an approved sports wagering platform and exclusively on events included in the board’s Sports Wagering Catalogue,” the letter reads.

The letter adds: “Any event-style ‘contract’, ‘swap’, ‘market’ or other ‘financial instrument’ that allows individuals to stake value on the outcome of a sporting event, other than a board-licensed or permitted sports wagering operator, constitutes illegal gambling.”

These warnings aim to prevent unlicensed sports prediction market offerings from entering Louisiana’s market. Regulators emphasized that unlicensed operators risk fines, legal action, and potential loss of their business operations in the state.

As sports prediction markets gain popularity across the United States, Louisiana’s actions signal stricter enforcement and regulatory oversight. Operators seeking to expand must ensure compliance with all state gaming laws, particularly regarding licensing and permitted event types.