Caesars Digital Prez: Online Casino Wave Possible Due To Prediction Markets

The law of unintended consequences may soon bring a wave of online casino legislation to state capitals all over America.

That potential was offered by Eric Hession, the president of Caesars Digital, addressing a group of accountants last week. 

He was speaking about sports betting and noted how many states have come to rely on the tax dollars betting brings in. But, he said, those revenue streams are either drying up or will get really thirsty as a result of prediction markets, which (at least as of now) owe states nothing when it comes to taxes.

And as a result of that, Hession thinks online casino expansion will undoubtedly enter the chat.

“As states start to see their revenue move to untaxed prediction markets, there will be pressure to legalize and tax it or allow casinos if they already have legalized sports betting,” he said at a gathering of the Nevada Society of Certified Public Accountants, according to a CDC Gaming report.

Of course, Hession isn’t the first casino executive, politician, interested party, or person born to a human mother to think the online casino wave is about to happen, though he may be the first to opine that prediction markets will be the cause.

False starts

In recent memory, there have been other so-called causes of a coming online casino wave that never — or at least hasn’t yet — materialized. 

Many observers believed that once federal COVID money dried up, states would resume the struggle of balancing their budgets and legislators would turn to online casino to help fill the gap. It would, after all, be a way to raise revenue without adding to their constituents’ tax burden.

Since the end of the pandemic, the only states to actually get online casino through to the finish line have been Rhode Island and Maine. New Jersey, Delaware, Pennsylvania, West Virginia, and Michigan all passed laws legalizing it pre-COVID, and Connecticut got it done in 2021.

The rise of sweepstakes casinos — another product that isn’t adding to the tax coffers of the states — was also thought to have potential to spur online casino legalization. Instead, many states have moved to ban the sweeps model.

New York — where much of the national media resides — has long been thought of as a gambling bellwether. After all, the negative press regarding sports betting didn’t really take off until after the Empire State legalized sports betting. As for iCasino, the thinking has been simple: Once New York legalizes it and takes its billion-dollar or so yearly cut out of it, other states would follow. Only hiccup: New York state Sen. Joseph Addabbo keeps introducing online casino legislation, and it keeps going nowhere.

In addition to the above, brick-and-mortar casino companies have long opposed (generally speaking) online casino expansion. And the throughline to legalization isn’t as clean a story as sports betting was, as many politicians — and again, their constituents — see a wide gulf between betting $10 on the Cowboys and putting a slot machine on a phone.

So will prediction markets — and the tax loss they could create for states — finally be the driver to push online casino legislation through from coast to coast?

Time will tell.