Massachusetts Warns Sportsbooks Against Prediction Markets

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Massachusetts Gaming Commission Warns Sportsbooks Against Prediction Markets

The Massachusetts Gaming Commission (MGC) has issued a formal warning to retail and online sportsbook operators in the state. 

The alert cautions that offering prediction markets could risk licenses and violate Massachusetts law. This action highlights increasing scrutiny of US online sportsbooks engaging with unconventional betting products.

MGC Letter to Retail and Online Sportsbooks

On November 13, MGC Executive Director Dean Serpa sent a notice to all licensed operators. The letter emphasized that “several Massachusetts sports betting licensees are considering or have begun the process of partnering with entities in the prediction market space.” 

Operators are not allowed to offer sports-related event contracts in Massachusetts, directly or through affiliates, or directing patrons to such contracts.

Additionally, the MGC requires licensees to submit a written response within 10 business days, outlining compliance measures. 

The notice reiterates that Massachusetts sports wagering is governed by M.G.L. c. 23N and must only occur through licensed platforms. Consequently, any introduction of sports-related contracts outside this framework could result in penalties, including license revocation.

The regulator warned that actions taken in other states “may inform decisions related to your suitability in Massachusetts.” Meanwhile, DraftKings and FanDuel recently explored prediction-market offerings but confirmed they will not launch in jurisdictions with legal sports betting, including Massachusetts.

Other States Crack Down on Prediction Markets

Massachusetts is not alone in regulating prediction markets. Nevada recently removed two major sportsbook operators for attempting to offer such options. 

Regulators in other US states are increasingly concerned about consumer protection, tax compliance, and the integrity of licensed sportsbooks.

Prediction markets differ from traditional sportsbooks. Specifically, users buy and sell contracts based on market demand, rather than odds set by analysts. This structure lacks state oversight and could divert revenue from licensed sports betting, resulting in sterner enforcement across various states.

As US online sportsbooks explore innovative products, lawmakers continue to monitor emerging trends. Massachusetts signals a firm stance against prediction markets, and other states plan to adopt similar policies to protect consumers and gaming revenue.