Eric Hession, the President of Caesars Digital, has raised concerns about the significant risks posed to gaming operators by prediction markets and increasing tax rates on sports betting. He noted that the proliferation of untaxed prediction products might compel more U.S. states to legalize online casino gaming to recuperate lost tax revenue.
During a panel discussion organized by the Nevada Society of Certified Public Accountants and led by Brock Elliott, Senior Vice President and Controller at Caesars Digital, Hession pointed out that the sports betting industry had experienced substantial growth over the years but is now facing heightened competition and regulatory challenges.
“As governments recognize the potential for tax revenue, I worry they will continue to raise taxes, and I’m uncertain how we can prevent that,” Hession remarked, according to CDC Gaming.
He highlighted the increasing competition in the industry, particularly with the emergence of new offerings such as sweepstakes casinos and sports-event prediction markets. “The business landscape is extremely competitive. Our traditional rivals are consistently innovating and investing,” Hession stated. “New players are entering the market with products like sweepstakes casinos and prediction markets that appear almost overnight.”
Hession expressed skepticism about the economic value of sports prediction markets, particularly those linked to player performance bets. “The notion that an 18-leg parlay on rebounds in the NBA holds significant economic value and requires price discovery seems exaggerated,” he said.
Over the last year, prediction markets related to sports outcomes have proliferated across the U.S., including in states like California and Texas, where conventional sports betting is still prohibited.
Hession mentioned that Caesars has been unable to engage in prediction markets due to unresolved regulatory issues, which has left the company lagging behind competitors like FanDuel and DraftKings. “We are significantly behind FanDuel and DraftKings, and we are not permitted to participate in prediction markets. They are gaining an advantage,” he commented.
He added that Caesars is awaiting legal clarity before making any decisions regarding entry into this market. “At some point, there will be clarity, and when that happens, we can compete effectively,” he noted. “I hope that the Supreme Court or the relevant authority makes a decision soon.”
Hession believes that the rise of prediction markets could ultimately motivate states to legalize iGaming as lawmakers aim to capture tax revenue that is currently moving to unregulated products. “As states observe their revenue shifting to untaxed prediction markets, there will be pressure to legalize and tax these markets or to permit casinos where sports betting is already legalized,” he explained.
He also pointed to various expansion opportunities in online gaming, such as Alberta's planned launch of sports betting and online casinos in July, Maine's upcoming iGaming rollout with Caesars and DraftKings as licensed operators, and the inclusion of iGaming in Washington, D.C.'s budget plans for 2027.
Caesars remains focused on growth within the U.S. and Canada rather than pursuing international expansion into markets like Brazil. “We believe that the most effective allocation of our resources is here in the United States and Canada,” he stated. “Venturing into another country would be a significant distraction.”
In response to concerns that Las Vegas has become too costly for visitors, Hession asserted that the city continues to evolve through investments in sports and entertainment. “I don’t believe sports have reached their full potential, but the city will continue to reinvent itself to keep entertaining and attracting visitors,” he concluded.