Nevada gaming chief rejects CFTC's peer-to-peer trading defence

Nevada Gaming Control Board Chairman Mike Dreitzer has rejected a second argument prediction market operators use to distinguish their products from traditional gambling, telling a webinar hosted by the Indian Gaming Association on 14 October that peer-to-peer trading structure does not place event contracts outside gambling law.

Dreitzer pointed to poker, horse racing and bingo as established gambling activities that also pit participants against one another rather than against a house. He added that the peer-to-peer framing may not accurately describe how prediction markets operate in practice, noting that hedge funds, designated contract markets and affiliated trading entities can take positions against retail customers.

He also dismissed the cash-out argument operators have advanced. Online sportsbooks have offered in-play settlement options for years, Dreitzer said, which means the ability to exit a position before an event concludes does not constitute a meaningful distinction.

The remarks came in response to the CFTC's two proposed rules issued the previous week: one that would expand the federal swap definition to cover sports, political and cultural event contracts, and a separate interim rule confirming that casino-style products fall outside that definition.