In an article published by Sports Betting Operator on September 11, Nelson Mullins attorneys Katherine Baker, Joshua Kirschner, and Samantha Ahearn examined the growing legal scrutiny of prediction markets. They explained how tribes, state regulators, and private recovery companies are using lawsuits and enforcement actions to challenge event contracts that resemble sports betting. 

“With prediction markets fighting legal battles from every angle, the status of sports-based event contracts is in question. In the eyes of some gaming regulators, this activity has become just another form of gray-market gaming, which could have suitability implications for gaming operators who are already regulated or seeking to be licensed under state gaming regimes.”

They also outlined potential consequences for prediction market operators, including heightened regulatory risks, compliance challenges under state and tribal law, and the possibility of broader restrictions on sports-themed event contracts.

“The rulings in these cases, along with response of state gaming regulators, are poised to create a sea change in how these platforms operate and are regulated.”

You may read the full article here.