Step onto a casino floor in Las Vegas nowadays, and one might think that they were at a video game convention.
Giant LED screens offer progressive jackpots in the tens or hundreds of thousands of dollars. Their bright screens flash scenes from movies or famous concerts. It’s the same at table games. You might find that no one’s dealing the cards, and no croupier is running the craps table or roulette wheel. It’s all electronic.
It's part of the changing landscape of Nevada’s gaming industry — an industry that is always looking for new and exciting ways to attract visitors and their hard-earned cash. On paper, it seems to be working. Casinos brought in more than 15 billion dollars in winnings last year. That’s the 5th record-setting year in a row.
However, during that same period, travel to Las Vegas and hotel occupancy dipped. In the latest sign that something might be off, wagers on this year’s Super Bowl were at their lowest level in 10 years. Part of the reason for that dip is the high prices on the strip and the rise of so-called prediction markets, Las Vegas Advisor Columnist David McKee told State of Nevada.
"Prediction markets are cutting into the action that sports betting operators see, and this does trickle down eventually to the major casino companies in their sports betting and online gaming divisions," McKee said. "I don't think it's keeping people from coming to Las Vegas for events like the Super Bowl, I think the high prices and the generally unfriendly attitude of Sin City towards consumers is more to do with that."
Prediction markets are federally protected exchange-traded platforms where participants buy and sell contracts based on the outcome of future events, such as elections, economic data, or sports results. Supporters of these markets say you’re essentially buying shares in an event that may or may not happen. McKee told State of Nevada that despite the industry's insistence, most consider prediction markets to be unregulated gambling.
"There is no regulation, no control," he said. "They're not answerable to anyone, and there are no safeguards against problem gambling. So it's definitely going to be something that has to be hashed out in the courts, because the federal government is thrown in with the prediction markets."
Someone else who spends much of his time thinking about the role the state should play in regulating these new markets is Mike Dreitzer, Chair of The Nevada Gaming Control Board, which regulates all gambling in the state. He was appointed to the job by Governor Joe Lombardo last year. Dreitzer started his career working for the Gaming Control Board before moving into the private sector, where he most recently served as CEO of Gaming Arts, LLC.
He’s been on the job for a little more than six months now. In a previously taped interview, I asked him about his latest efforts to streamline the regulatory process.
"We want new technology," Dreitzer said. "We want existing technology to come to the board so that we can review it, approve it, and allow our licensees to put out what I would consider to be the latest and greatest in technology to make the most compelling gaming experience they possibly can for their customers."
Earlier this month, the control board filed a suit in Carson City District Court that looks to bar the prediction market operator Kalshi from offering certain sports and event contracts to Nevada residents. Nevada says those contracts resemble wagering as defined by state gaming law and therefore require a Nevada gaming license.
"If there are companies that want to provide this technology in Nevada, we have absolutely no problem with that," Drietzer said. "The issue is, come to Nevada, and as everybody else has pursued a licensing structure, you know, go through the suitability requirement that everybody goes through, get your license like everybody else does."
Guests: David McKee, columnist, Las Vegas Advisor; Mike Dreitzer, chair, Nevada Gaming Control Board
