BetMGM CEO Calls CFTC Rules Cosmetic Amid Market Battle

What Is Happening Between BetMGM and the CFTC?

Adam Greenblatt, the CEO of gaming company BetMGM, is skeptical about recent actions taken by the Commodity Futures Trading Commission (CFTC). He believes the federal agency's efforts to exclude casino-style products from its jurisdiction are merely surface-level adjustments.

Speaking during BetMGM's third-quarter earnings call on October 13, Greenblatt described these regulatory changes as "cosmetics in pursuit of survival." He emphasized that the legal debate surrounding prediction markets and sports betting remains far from settled.

The CFTC's New Rules and What They Mean

On October 9, the CFTC introduced rule changes, including an interim final rule. This rule explicitly specifies that casino-style gambling products, such as wagers placed on sportsbooks and traditional casino games, fall outside the legal definition of a financial swap.

CFTC Chairman Michael Selig explained that the agency proposed defining sports, political, and other event contracts as swaps to keep them under the CFTC's exclusive authority.

However, Greenblatt pointed out that this rule change does not eliminate the underlying legal risk. He noted that administrative rules made today can easily be modified or undone in the future. If prediction markets survive their ongoing legal challenges, casino-like products could reemerge under a different format.

Why the Supreme Court Might Have the Final Say

The central legal dispute focuses on whether federal financial regulators or state authorities hold jurisdiction over these products. Greenblatt expects the U.S. Supreme Court to resolve the issue during its 2026-2027 term.

He stated that the key legal test is determining whether Congress originally intended for the CFTC to oversee sports betting and casino games, which he believes was not the case.

Recent federal court rulings have consistently sided with state officials, state attorneys general, and Native American tribes:

• On September 25, the Sixth Circuit Court of Appeals ruled that Ohio and Tennessee have the authority to enforce their state gambling laws against prediction market operator Kalshi.
• New Jersey has filed a petition in its legal fight against Kalshi, with Kalshi's official response due by November 9.

Prediction Markets Experience Massive Trading Volume

Despite ongoing courtroom battles, trading activity on prediction platforms has grown rapidly. Data from Aldrin Research reveals that sports and combo trading volume on prediction exchanges jumped roughly 72% to $68.2 billion during the 30-day period ending September 29.

Concurrently, specific trading activities are facing heightened scrutiny. Federal authorities are examining nearly one million trades of similar size, totaling approximately $5 billion, that passed through a single Kalshi market since August.

BetMGM's Q3 Financial Performance and Strategic Shift

Alongside its regulatory updates, BetMGM reported its financial performance for the third quarter:

• Net Revenue: Reached $710 million, representing a 7% increase compared to the previous year.
• Adjusted EBITDA: Surged 112% year-over-year to $86 million.
• Monthly Active Players: Declined slightly by 3%.
• iGaming Revenue: Accounted for $483 million of total quarterly revenue.

To adapt to changing market conditions, Greenblatt noted that BetMGM is scaling back investment in lower-return states where it only provides online sports betting (OSB). The company is redirecting resources toward its higher-margin iGaming segment.

Greenblatt added that industry competition remains strong, particularly from unregulated operators offering sports betting products.

Looking Ahead in the Prediction Market Sector

"I think the key test is whether this was the intent of Congress, and I think that will be shown to not be the case," stated BetMGM CEO Adam Greenblatt.

As financial derivatives and prediction platforms continue to intersect with sports wagering, traders should note that regulatory boundaries remain dynamic. Market rules and operational permissions can change based on upcoming court decisions and state regulatory actions.