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Victor Strategies EVP Gene Johnson: Prediction Markets ‘Biggest Scam I’ve Ever Seen’

By jili tutorial · August 31, 2026

Victor Strategies EVP Gene Johnson: Prediction Markets ‘Biggest Scam I’ve Ever Seen’

The Blurring Line Between Prediction Markets and Sportsbooks

Player props, multi-leg parlays, point spreads, and over/unders. Open an app offering all of that today, and you might assume you’ve landed in a sportsbook. But you could actually be looking at a federally regulated prediction market.

This is exactly the future Gene Johnson foresaw. Back in March 2025, Johnson wrote a column warning that sports prediction markets wouldn’t stop with simple game-outcome contracts. He predicted they’d move into player props and parlays until it became nearly impossible to distinguish prediction markets from sportsbooks.

More than a year later, CasinoBeats spoke with Johnson in a wide-ranging interview and asked him to revisit that prediction. His answer: even that forecast didn’t go far enough.

“It’s worse than that,” he said. “Eventually they’ll become indistinguishable from casinos.”

A Veteran’s Perspective on the Gaming Industry

Johnson speaks from decades of experience. He started his career in Atlantic City casinos in 1989, later founded EE Johnson Research, held senior roles at Spectrum Gaming Group and Gaming Knowledge Partners, and co-founded Victor Strategies with Victor Rocha and Rob Miller in 2016. Today, he serves as the firm’s executive vice president.

During our conversation, Johnson made clear that he doesn’t view all prediction markets the same way. Weather, elections, and commodity markets are all fair game, in his view. Sports betting and casino products are where he draws the line.

And when it comes to sports event contracts? Johnson’s verdict is unequivocal: “This is the biggest scam that I’ve ever seen in my entire life, to put it mildly.”

Sports Prediction Markets Could Open the Door to Casino Games

Johnson isn’t alone in worrying that sports event contracts won’t be the last stop for prediction markets as they push further into state-regulated gambling territory. The idea of a prediction market built around slots, blackjack, or roulette may sound far-fetched, but those casino games have already entered the conversation.

Commodity Futures Trading Commission Chair Michael Selig touched on this during a February 2025 interview on Bloomberg’s Odd Lots podcast. When asked if prediction markets could offer contracts related to something like a roulette wheel spin, Selig responded: “Some of these types of gaming, where it’s really a game of chance and not a game of skill, there’s definitely a difference. It’s possible that you could construct some sort of contract, an esoteric derivative.”

The CFTC took up the issue in a proposed rule released in June 2025, stating: “The Commission preliminarily believes that event contracts involving games whose outcome depends on random chance—e.g., pure luck—are likely to be contrary to the public interest.”

When we asked Johnson about Selig’s comments, he was unpersuaded. “Sure, sure, sure. Yeah, I promise I’ll respect you in the morning,” he said sarcastically.

Selig’s Shifting Stance Raises Concerns

Those concerns aren’t unfounded. During his confirmation hearing in November 2025, Selig repeatedly said he’d “look to the courts” to determine whether sports event contracts should be classified as gaming. However, since taking office, the CFTC chair has directed the agency to intervene on behalf of federally regulated prediction markets in legal battles with states over sports event contracts.

Kalshi’s own history gives Johnson another reason for skepticism. In a November 2024 brief filed with the D.C. Circuit, the company argued that “Congress did not want sports betting to be conducted on derivatives markets.” Yet by January 2025, Kalshi had launched sports event contracts nationwide.

“Kalshi was arguing for prediction election markets, and in those arguments, their attorneys said that they would never do sports betting because that’s gambling,” Johnson said. “As soon as it became convenient for them, they ignored that.”

That reversal is why he’s not confident prediction markets will keep their word when they say casino games are off-limits. If left to their own devices, Johnson believes prediction markets could eventually become something far more concerning.

“That’s where the existential part comes in. Conceivably, in the future, you could see nationwide crypto casinos [for people 18 and older] being run under prediction market logic,” he said.

A Glimpse at the Future: Slot Machines Under Prediction Market Logic

The public has already seen what prediction market trading could look like when packaged as a casino game. In June 2025, Betr COO Alex Ursa built a slot-style interface using Kalshi’s API, describing it as using “real transactions with a real account.” Kalshi quickly blocked his account, citing a policy violation.

Johnson noted that Nevada Gaming Control Board Chair Mike Dreitzer observed something similar at ICE Barcelona in January 2025. “He was demoed a five-reel slot machine running prediction market logic in the background.”

Johnson sees this as a preview of how far the federal theory behind prediction markets could extend. “Under our existing federal upside-down world, you could put this machine in any convenience store anywhere in the U.S., and you could claim it was legal,” he said. “So it’s a threat to land-based gaming as well as online.”

His concern ultimately comes down to where that theory stops. “If you can say that a sporting event or a sporting contest qualifies as an event with economic significance, what’s to stop you from saying that the turn of a card is not an event, that the fall of a slot reel is not an event?”

Prediction Markets Threaten State and Tribal Gaming Authority

In Johnson’s view, the stakes go well beyond competition between prediction markets and sportsbooks.

“Basically, this is an end run around regulated gaming,” he said. “This prediction market concept avoids taxes, including the federal excise tax. Avoids state regulation. It’s an affront to state sovereignty and tribal sovereignty as well.”

Johnson doesn’t object to sports event contracts themselves. “I have no problem if Kalshi, for instance, wants to offer sports contracts in a state in the U.S.,” he told us. “That’s fine if they comply with the regulations, the taxes, the rules that are set up for other operators.”

What he objects to is companies offering gambling under a federal commodities regime without going through the state and tribal systems that oversee sportsbooks.

A Repeat of Daily Fantasy Sports History?

Johnson compared the strategy prediction markets are pursuing to the daily fantasy sports boom of 2015. Back then, DraftKings and FanDuel saturated the airwaves with advertising and amassed huge customer bases before the Supreme Court struck down the Professional and Amateur Sports Protection Act in 2018.

Johnson believes prediction markets are attempting a similar maneuver. “They can run with this as long as possible to become too big to fail, get it so ingrained in the business and the consciousness of the consumer that it’ll be impossible to extract,” he said.

Prediction markets are now available on DraftKings, FanDuel, and Fanatics. Johnson sees this as a return to their old playbook. “It’s clear that DraftKings and FanDuel, in particular, went back to their disruptor origins,” he said.

DraftKings hasn’t been shy about explaining its strategy. In a March 2026 investor update, the company said Predictions “enables the Company to offer sports event contracts in states without regulated online wagering, expanding its reach to nearly the entire U.S. population.”

Utah: A Case Study in Regulatory Loopholes

Utah demonstrates how this plays out on the ground. Sports betting is illegal in the state, but prediction markets offer sports event contracts there. “You can walk into the Tabernacle in Salt Lake City, be 18 years old, and place a sports bet,” Johnson said.

While a federal judge recently ruled that Utah could enforce its anti-gambling laws against Kalshi, sports event contracts remain available to state residents as Kalshi appeals the decision.

We asked Johnson about a letter former Sen. Christopher Dodd submitted to the CFTC in response to its proposed prediction-market rules. Dodd, who co-authored the Dodd-Frank Act, wrote: “Congress was well aware of existing federal gaming laws when Dodd-Frank was passed and had no intention of amending those laws.”

Johnson connected Dodd’s point to his own experience with New Jersey’s fight to legalize sports betting. “New Jersey spent five years litigating,” he said. “They had a referendum to allow sports betting, but they weren’t allowed to do that because of PASPA. The NFL sued the state to prevent sports betting. So how is it that no one discovered this magical property?”

The idea that sports betting was available through CFTC-regulated markets all along is, in Johnson’s words, “a canard.” “It is one of the greatest lies that’s ever been told,” he said.

Threats to Tribal Sovereignty

Johnson also sees prediction markets as a threat to tribal sovereignty. The Indian Gaming Association and the National Congress of American Indians have both raised concerns about the potential impact on tribal gaming operations, which rely on exclusive compacts with states to operate casinos and sportsbooks.

If prediction markets can offer similar products without state oversight or revenue-sharing agreements, Johnson argues, it undermines the entire framework that tribes have spent decades building.

The Bottom Line

For Johnson, the fundamental question is whether prediction markets will continue operating as what he calls “regulatory arbitrage” — using a federal loophole to bypass state and tribal gaming laws. His answer, based on 30-plus years in the industry, is clear: without intervention, they’ll keep pushing until the line between prediction markets and casinos disappears entirely.