iGaming Weekly Recap (April 14–20, 2025): Tennessee Calls for Federal Action on Prediction Markets

Tennessee has urged the federal Commodity Futures Trading Commission (CFTC) to ban prediction markets offering contracts on sports events. The Tennessee Sports Wagering Council (SWC) argues these contracts are bets that violate state gambling laws by operating without licenses.

Tennessee fears prediction markets bypass consumer protection rules and threaten its regulated sports betting market. In a letter to the CFTC, the SWC highlights multiple state regulation violations by these platforms. Tennessee’s move coincides with the CFTC’s planned roundtable on prediction markets.

DraftKings has withdrawn its application to create a prediction market called “DraftKings Predict.” The company initially aimed to compete with existing platforms but pulled back without stating an official reason. Speculation points to regulatory uncertainties around prediction markets, which fall under the federal Commodity Futures Trading Commission (CFTC) rather than state sports betting laws. Legal troubles faced by competitor Kalshi may have also raised concerns. Despite the withdrawal, DraftKings says it’s still monitoring the prediction market space. This move sparks questions about the company’s future plans in this growing sector.

A proposal has emerged to raise North Carolina’s sports betting tax from 18% to 36%. Pushed by the Republican-led Senate, the main goal is to boost budget revenue, with a significant portion earmarked for the University of North Carolina system and athletic programs at UNC and NC State. The new revenue distribution model would also require larger universities to play more games against smaller UNC system schools. The tax hike aims to cover rising costs, address a potential budget deficit, and fund educational initiatives.

The House of Representatives rejected the Senate’s version of HB 1308, which set licensing fees and tax rates. The main sticking point was differing approaches to financial and oversight issues. A conference committee now has until May 1, 2025, to reach a compromise, or the bill will fail. Governor Josh Green supports legalization for its potential tax revenue, but the legislative stalemate is stalling progress.

Massachusetts is investigating ESPN Bet after a “College GameDay” host called a wager a “risk-free investment,” violating state sports betting laws and ESPN Bet’s own guidelines. The remark is problematic because Massachusetts law bans terms like “risk-free” in betting ads to prevent misleading consumers.

PENN Entertainment, ESPN Bet’s parent company, self-reported the incident, but now faces potential fines or even license loss in Massachusetts. The Massachusetts Gaming Commission is probing the matter, emphasizing its commitment to protecting players from deceptive claims, echoing prior actions against other operators. While PENN was praised for self-regulation, financial penalties for the violation remain a possibility.