The Massachusetts Gaming Commission (MGC) issued a strong warning to operators on Thursday, making it clear that prediction markets are off-limits in the state. 

License Revocation, on the Table

Unlike some other regulators, Massachusetts didn’t clearly explain what would happen to operators who choose to partner with prediction markets in other states, as the focus was entirely local.

“Please accept this letter as notice that you are prohibited from offering sports-related event contracts in Massachusetts, directly or via an affiliate, related business entity, or other association, or directing patrons to such event contracts being offered in Massachusetts,” the letter states.

Signed by executive director Dean Serpa, the letter leaves little room for ambiguity. Offering prediction markets, or even directing Massachusetts residents to them, could trigger enforcement action, including the revocation of a license. 

Written Response Needed

Operators are required to submit a written response within 10 business days detailing how they will comply. Other states that have warned operators about prediction markets, such as Arizona, Nevada, and Ohio, have not demanded this kind of formal compliance plan.

The letter comes one day after the MGC met in executive session to discuss prediction markets, and just after FanDuel announced it would launch prediction markets in partnership with CME next month. 

Around the same time, the Nevada Gaming Control Board revealed that FanDuel was surrendering its Nevada retail license, and DraftKings withdrew applications in that state, both moves linked to plans to offer prediction markets.

While Massachusetts is focusing on activity within its borders, it did note that “to the extent any other regulator takes action against your license due to your operation in the prediction market space, such action may inform decisions related to your suitability in Massachusetts.” 

This suggests that, for example, if the Ohio Casino Control Commission chooses to revoke a license due to prediction markets, Massachusetts could take that into account when reviewing a local licensee.

FanDuel and DraftKings are actively moving toward offering sports event contracts. DraftKings recently announced that it will launch prediction markets, including sports, following the acquisition of the Railbird platform, which is already licensed by the Commodity Futures Trading Commission. 

Other operators licensed in Massachusetts include BallyBet, BetMGM, Caesars Sportsbook, Fanatics Sportsbook, and Penn Entertainment. Encore Boston Harbor offers a physical sportsbook but does not have a digital platform in the state.

This isn’t Massachusetts’ first move against prediction markets. In September, the state sued Kalshi to block it from operating locally, filing in Suffolk County Superior Court. Kalshi had attempted to transfer the case to federal court, but the U.S. District Court denied the request, sending it back to the state court. 

A hearing is scheduled next Tuesday, as the state seeks an injunction to prevent Kalshi from offering its services.