Caesars Digital President Says Prediction Markets Could Be the Catalyst That Finally Unlocks iGaming Across the US

The president of Caesars Digital told a room of CPAs last week that the rapid growth of prediction markets represents one of the biggest risks to traditional online sports betting operators — but he also sees it as a potential accelerant for iGaming legalization across the country. Eric Hession, speaking at a Nevada Society of Certified Public Accountants event moderated by Brock Elliott, senior vice president and controller for Caesars Digital, laid out a frank assessment of the competitive pressures his company faces and what he believes comes next for the industry.

Hession identified two primary threats to Caesars’ online sports betting business: state governments raising tax rates and the unchecked expansion of prediction market platforms. He said the business has experienced exceptional revenue growth “with a tailwind” until recently, but that both forces are now creating headwinds that are difficult to counter directly. “When the government sees the tax-revenue opportunity, I fear they will keep raising the taxes and I’m not sure how to stop that,” he said.

Prediction Markets as an Unleveled Playing Field

Hession was candid about the competitive disadvantage Caesars faces relative to platforms like Kalshi and Polymarket, which operate under Commodity Futures Trading Commission oversight rather than state gambling licenses and are therefore not subject to the same costs and regulatory requirements. He noted that Caesars is not permitted to participate in prediction markets under current regulatory interpretations, meaning rivals are gaining a head start in states like California and Texas where sports betting remains illegal.

“We started so far behind FanDuel and DraftKings and we’re not allowed to participate,” Hession said. “They’re getting a head start. But I’m not sure we’ll get wiped out by prediction markets.” He expressed hope that regulatory clarity would come quickly, saying that once the rules are established, Caesars is positioned to compete. “There’s no question that every day, we’re falling further behind, because there’s no clarity,” he added.

Why iGaming Could Be the Response

Perhaps the most consequential observation in Hession’s remarks was his theory that prediction markets could inadvertently push more states toward legalizing online casino gaming. He said that as states watch sports betting revenue flow to untaxed prediction market platforms, the political calculus for iGaming legalization shifts. “As states start to see their revenue move to untaxed prediction markets, there will be pressure to legalize and tax it or allow casinos if they already have legalized sports betting,” Hession said.

That view has significant implications for the broader online gambling industry. States that have been slow to move on iGaming legislation may find the fiscal argument harder to ignore when tax revenue from sports betting is being redirected to federally overseen platforms. Hession pointed to near-term expansion opportunities including the province of Alberta in Canada launching online casino gaming in July and Maine, which will launch iGaming in July with both Caesars and DraftKings as licensed operators. Washington, D.C., has also added iGaming to its 2027 budget.

Hession also addressed the possibility of Caesars moving into the DFS-Plus regulatory category, which allows fantasy sports contests with fixed-odds payouts and is now operational in roughly 20 states. He indicated that the timeline for such a product launch is at least a year away given existing development commitments. For bettors currently weighing Caesars sportsbook against competitors, the company’s strategic outlook reflects a business navigating a rapidly evolving competitive landscape from a position of established market presence but ongoing regulatory uncertainty.