AGA study: 85% of people believe sports event contracts are gambling
The research is a valuable insight into how the public are reacting to the controversial emerging vertical.
Key points:
– The research found that over 80% of people thought sports event contracts should be regulated like online sports betting
– 70% of those asked thought that prediction markets were exploiting loopholes to act as unlicensed sportsbooks
– Despite growing discourse between the public, operators and prediction markets, the CFTC is doubling down on its stance
The American Gaming Association (AGA) has published a study on public opinions regarding sports event contracts and prediction markets.
Prediction markets have evaded regulation by gambling authorities in the US after the Commodity Futures Trading Commission (CFTC) ruled them to be exchange markets.
They work by letting people wager on one of two outcomes: Will the coin land heads or tails?
However, the issue is that they are also allowed to offer wagering on sports teams and events under this model, too, including in states where sports betting is still banned.
The latest research by the AGA found that out of the 2,000+ people questioned, 85% of them categorised sports event contracts as gambling, as opposed to a financial instrument as decided by the CFTC.
80% believed that sports event contracts should be regulated in the same manner as online sports betting, and 69% thought that the decision to allow prediction markets and sports event contracts should be down to each state’s authority – in a similar manner to gambling.
Interestingly, 70% of people agreed that prediction market platforms offering sports event contracts are exploiting loopholes to act as unlicensed sportsbooks.
Good to know: On 5 September, the Securities and Exchange Commission (SEC) and CFTC released a joint statement saying “we reaffirm the need to ensure regulation does not stand in the way of progress” and they will “collaborate to consider where event contracts may be made available to U.S. market participants regardless of where the jurisdictional lines fall”
Only 4% of people asked disagreed with this, with the remaining 26% choosing a neutral ‘neither’ option.
It is worth noting that people aren’t necessarily against prediction markets and sports event contracts.
A total of 84% thought they should only be available in state-licensed sportsbooks, which is something Underdog has invested in recently.
FanDuel has also expressed some interest in the vertical, but MGM Resorts was clear in its stance that it “does not endorse it” in its latest conference call.
Bill Miller, AGA President and CEO, said: “With sports betting operational in 38 states and Washington DC, consumers expect prediction markets to follow the same rules and safeguards as state-licensed sportsbooks.
“This research makes clear: Americans know a sports bet when they see one—and they expect regulators and policymakers to treat them accordingly.”
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