Massachusetts casino revenue holds steady while prediction markets push into new states

In July, the three licensed casinos in Massachusetts produced roughly $95.78 million in gross gaming revenue. Mobile and retail sportsbooks added another $65.56 million in taxable wagering handle. The numbers are solid without being spectacular — the kind of result that tells a regulator the framework is working and tells a competitor that the door is not obviously open.

That door, however, is what the prediction market industry is currently trying to walk through in California, where DraftKings has launched a prediction platform despite the state's prohibition on sports betting. The maneuver is precise: California voters have blocked sports wagering twice, but event contracts regulated under the CFTC's federal framework sit in different legal territory. DraftKings is testing whether federal preemption can do what the ballot box would not.

This is the same structural argument Kalshi has been running in Nevada and New York, and it matters that DraftKings is now making it in the largest consumer market in the country. The reporting from Nevada, already in front of the Ninth Circuit, is the legal scaffolding. California is the commercial bet on top of it.

My read is that the market is underweighting how consequential California specifically is to this question. If DraftKings can operate there without triggering a state enforcement action — or if it triggers one and wins — the preemption argument stops being theoretical. Every state gaming commission in the country would have to recalibrate what it can and cannot regulate. The Massachusetts numbers, consistent and growing since the state first licensed gaming, represent exactly the kind of established revenue base that state regulators are trying to protect. A federal override that lets prediction market operators bypass state licensing processes is not an abstraction to a gaming commission sitting on $2.99 billion in cumulative tax collections.

The Gemini-Apex deal, finalized as a letter of intent, points in the same direction from a different angle. Gemini Titan holds a Designated Contract Market license. Gemini Olympus holds a Derivatives Clearing Organization license. The infrastructure is federal, end to end. Apex's brokerage clients get crypto event contracts without building their own regulatory plumbing, and Gemini gets distribution into the brokerage channel without going state by state. That is a deliberately constructed end-run around the state-by-state licensing model, and it is legal precisely because the CFTC framework exists.

The question state regulators have not yet answered publicly is whether they treat DraftKings in California the way Nevada has tried to treat Kalshi — as a jurisdiction problem — or whether the California Attorney General concludes the federal argument is strong enough that enforcement would be counterproductive. I think enforcement is unlikely before the Ninth Circuit rules. A loss in Nevada would not just close that case; it would hand DraftKings a precedent it could wave at Sacramento.

The Massachusetts revenue figures will look like a footnote by the time that ruling arrives. For now they are a useful baseline: what a mature, licensed, state-regulated gaming market produces when everything goes to plan. The prediction market operators are not trying to replace that market. They are trying to exist beside it, under federal cover, before the states finish deciding whether to let them in.