Fertitta Counsel: Texas Gaming Stalled Until 2032, SCOTUS Will Rein In Prediction Markets
Steven Scheinthal, general counsel for Houston-based Fertitta Entertainment, told Nevada regulators he sees little hope for Texas legalization and expects the Supreme Court to side with states over federal prediction market operators.
Texas Gaming Stays Frozen, at Least Through the Decade
The general counsel and executive vice president of Fertitta Entertainment walked into a Nevada Gaming Commission licensing hearing Thursday and offered a blunt assessment of two of the most contested questions in American gambling right now. Steven Scheinthal, appearing before the commission as part of his licensing as a Fertitta Entertainment board member, said Texas legalized gaming is not coming anytime soon, and that prediction market operators should not count on federal cover once the Supreme Court weighs in.
On Texas, Scheinthal was direct. Las Vegas Sands led a high-profile push to get gaming approved through the Texas Legislature, and it failed. According to CDC Gaming’s reporting, Scheinthal told regulators: “Based on the current state politics, I don’t envision that gaming would come to Texas. Things could change, but if the politics stay the same in 2028, nothing will change in Texas until 2032.” For operators who have watched Texas dangle as one of the last great untapped commercial gaming markets in the country, that is a cold bucket of water.
Supreme Court Expected to Back the States on Prediction Markets
The more immediately consequential topic may be prediction markets, and Scheinthal gave regulators his clearest read yet on where that fight is headed. Several operators have been accepting what amount to sports wagers by operating under the authority of the Commodity Futures Trading Commission, arguing federal commodities law supersedes state gambling regulations. Nevada and other states have taken them to court, and those cases are widely expected to climb to the Supreme Court.
Scheinthal’s view, as reported by CDC Gaming, is that the states will win. “Ultimately, the Supreme Court will say it’s up to the states to decide and it will be up to each state to determine the rules,” he said. “If the states make it unlawful, I don’t think a prediction market company will be able to point to the CFTC as a protection point once the Supreme Court speaks to it.”
He acknowledged he was theorizing, but grounded his prediction in the current court’s record: “If you look at who’s on the Supreme Court and their previous decisions about state’s rights, that would be the direction they’d head.”
Scheinthal added some notable market color on top of that analysis. He said a famous investor who shorted the housing market in 2008 and made billions of dollars has put money into both FanDuel and DraftKings, apparently betting that prediction market competitors will be shut down by state action and the courts. That context matters for understanding how sophisticated money is positioning itself across the sports betting and prediction market divide right now.
Clearing the Air on DraftKings
Scheinthal also used the hearing to address lingering questions about Tilman Fertitta’s relationship with DraftKings. News reports had suggested Fertitta might be joining the DraftKings board, which would have created a thorny problem: the NBA reportedly indicated that if Fertitta took a board seat, DraftKings would have to remove the Fertitta-owned Houston Rockets from its app.
“That’s not something DraftKings was willing to do,” Scheinthal said, according to CDC Gaming. “So Tilman agreed to never become a board member. He has zero operational control. He’s an investor just like you or I might own some shares in DraftKings stock.”
Fertitta Entertainment and its principals own roughly 2% of DraftKings stock, Scheinthal said, with no control position attached. Scheinthal noted he personally owns some DraftKings shares as well.
The hearing came as Fertitta Entertainment is in the middle of a high-profile acquisition process involving Caesars Entertainment, which has kept Nevada regulators busy with a string of Fertitta-related appearances this summer. Scheinthal’s commentary on Texas and prediction markets amounted to a broader industry outlook from one of the more closely watched legal minds in gaming at the moment, and his skepticism toward both Texas expansion and federal prediction market operators reflects a significant current of thinking in the regulated gaming community.
Why does Fertitta Entertainment's counsel doubt Texas will legalize gaming soon?
Steven Scheinthal told Nevada regulators that based on current state politics, he does not envision gaming coming to Texas, and said nothing will change until at least 2032 if the political climate stays the same through 2028.
What is the prediction markets legal dispute about?
Nevada and other states are locked in legal battles with prediction market operators that accept sports wagers under the authority of the Commodity Futures Trading Commission rather than state regulators. Cases in federal court are expected to reach the Supreme Court.
Does Tilman Fertitta have a board seat or control over DraftKings?
No. According to Scheinthal, Fertitta and his company own about 2% of DraftKings stock but he has no operational control and agreed to never join the DraftKings board, because doing so would have required DraftKings to remove the Houston Rockets from its app.