Midterms reset the odds for gambling - and dial up heat on prediction markets

The post-election map looks friendlier for casinos, with Texas in focus

Gaming chiefs say the political ground moved. "The whole landscape changed," Wynn Resorts CEO Craig Billings said on the company's Thursday call. As Wynn pursues a project it says would mark the United Arab Emirates' first sanctioned casino, slated for 2027, Billings said he believes the election will influence the "likely trajectory of the conflict in the region."

He also sees upside in Texas. Billings called it "a fascinating market," noting many Texans head to Oklahoma to gamble at tribal casinos, which he described as a giant stealth market. The election removed a key block: in a major shock, Democrat Vikki Goodwin unseated longtime Lt. Gov. Dan Patrick, who had consistently blocked gambling expansion. Penn Entertainment CEO Jay Snowden, after reporting record third quarter revenue and boosting guidance for Penn's brick and mortar business, said Election Day was "a very good day overall for the industry, and certainly for Penn."

Penn has been laying groundwork in Texas for years. The company runs two of Texas's three Class 1 thoroughbred tracks and has cultivated relationships with local officials. "We're ready to play offense," Snowden said, adding that if lawmakers move toward legalization, he expects Penn is "positioned as well, if not better than really anybody in the sector."

Las Vegas Sands has also invested heavily to legalize casino gambling in Texas. Chairman and CEO Patrick Dumont said the company views Texas and the Metroplex as a chance to build an asset that serves business and future tourism, and he said a new Dallas Mavericks arena could potentially incorporate a casino. "Whatever Las Vegas Sands can do in the future, that will be its own location, its own site and its own timeline," he said. Spokesman Ron Reese said it is too early to speculate on next steps in Texas, but the company will monitor developments closely.

Houston Rockets owner Tilman Fertitta - currently the U.S. ambassador to Italy - owns the Golden Nugget casino chain, is the largest investor in Wynn Resorts, and is purchasing Caesars with the aim of taking it private. Following a CNBC appearance in Italy, he said, "Of course I want gaming in Texas!"

If Texas authorizes gambling, likely participants would include DraftKings, FanDuel (owned by Flutter), Caesars, Fanatics, and BetMGM - with BetMGM jointly owned by MGM and Entain - to line up. Should Texas open up, the anticipated field features DraftKings, FanDuel (owned by Flutter), Caesars, Fanatics, and BetMGM, a joint venture of MGM and Entain. But the political math still matters.

Legalizing casino gambling or sports betting requires a constitutional amendment that passes by two-thirds in both chambers and then wins at the ballot box. Power in Austin is split: Democrats flipped the state House, Republicans held the Senate, and Democrat Gina Hinojosa won the governorship.

State-by-state shifts: where momentum is - and is not

Truist gaming analyst Barry Jonas called the midterm takeaways mixed. He wrote Wednesday that "The Ohio governor-elect Amy Acton's support for regulated online casinos could improve the chances of iGaming legalization." He added that Nebraska voters turned down ballot proposals to legalize online wagering.

Georgia could also open a door. Democrat Keisha Lance Bottoms captured the governor's office after running on a pledge to put the question of casino legalization to voters, with the proceeds projected to support education. In Georgia, both sports betting and casino gaming are still unlawful, and prior sports-betting bills died in the House.

Regulatory shifts and new markets remind investors that adapting tools preserves long term advantage. We're hosting our first ever investor livestream on 11/17 to show you how to use ChatGPT and Claude to invest like a pro, hosted by Briefs Finance CEO Jaspreet Singh. Save your seat.

Penn sees another tailwind if states tighten rules on so-called skill-based gaming machines that go up against casinos and state-sanctioned video gaming terminals. Snowden noted that supporters of those devices saw their clout diminish or lost races in multiple states. He attributed the recent year-over-year strength in Pennsylvania gaming revenue to skill games being shut down in mid October, while cautioning it is too soon to tell if that pace will hold.

He also pointed to strong growth in Missouri as the state attorney general pursued those devices. Penn operates four casinos in Pennsylvania, runs video gaming terminals there and in other jurisdictions, and owns three casinos in Missouri.

In Indiana, a casino license proposal was turned down by voters in three counties. Penn considers that outcome favorable, since it curbs fresh rivals to the current casinos in Indiana as well as those located just over the state line in Illinois and Ohio, and some industry observers say a surge of left-leaning progressives might try to rein in gambling companies.

Prediction markets head into a tougher political climate

Democratic victories are likely to increase pressure on prediction markets, even as supporters highlight their ability to forecast the results. "Every eligible customer should have access to these markets, which are federally regulated through our CFTC-registered Futures Commission Merchant," a Robinhood spokesperson said.

Lawmakers in Congress may additionally consider fresh restrictions. A bipartisan measure titled the Prediction Markets Are Gambling Act would prohibit CFTC-regulated exchanges from listing contracts connected to sports or casino-style games. As of the election, the measure had merely been sent to committee. A veto proof law requires two-thirds support in both chambers, and no such vote is currently set.

The American Gaming Association has mounted a campaign against prediction markets, labeling them unlicensed gambling. "The prediction markets are facing a tsunami of criminal charges, major civil investigations and significant defeats in court," CEO Bill Miller told CNBC. "In the aftermath of the election, we expect the bipartisan scrutiny of these platforms to further intensify."

Polymarket said its venue is "an institutional-grade exchange with strong market-integrity and customer-protection programs" and said it is open to engaging with lawmakers from both parties. Kalshi did not respond to multiple requests for comment.

The legal fights are already live. New AGs could also choose to follow Utah's lead in bringing criminal cases, and Arizona already has criminal charges pending.

The bottom line for investors

Casinos see new doors opening in Texas and beyond, while prediction markets face more regulatory and legal headwinds. Where revenue pools form next depends on statehouse math and court calendars, from iGaming momentum in Ohio to skill-game crackdowns in Pennsylvania and Missouri, and limits on new competitors in Indiana.

If you are tracking gaming exposure in your portfolio, watch Texas legislative dynamics, AG enforcement trends, and how operators position for potential Georgia and Ohio openings. The policy tape is moving, and with it, the growth runway for casinos, sportsbooks and prediction exchanges.

Keeping informed about evolving market structures can give patient investors a helpful edge. On 11/17, our CEO Jaspreet Singh goes live for our first ever investor livestream on how to use ChatGPT and Claude to invest like a pro. Register to join him.