Each Wednesday, I provide commentary in short-form audio on a topic in the US gambling industry. Editor’s note: The newsletter will go dark until The Cashout on Sunday, unless there’s news.
The US gambling industry is always dealing with disruption. But it felt like there was more disruption than usual this year, didn’t it?
I take a look at what I thought were the biggest stories of the year in the final podcast of 2025. I also wrote it all down below if you don’t like to listen to my voice!
To close out 2025, I wanted to take one more opportunity to thank all of you for subscribing to, reading and sharing this newsletter. I appreciate you welcoming me into your inboxes, and I never take it for granted.
Stats for The Closing Line for 2025:
285 posts(!)
Roughly 950,000 views
As of this morning, there are 4,552 subscribers
Until next year…
5. Farewell, ESPN Bet
In late 2023, many people believed that FanDuel and DraftKings were getting real competition atop the US sports betting industry.
In a series of swift moves at the time, Penn Entertainment sold Barstool Sports (for $1) and struck a deal with ESPN to become the brand and marketing funnel for its sportsbook.
By 2025, it was clear that the ESPN Bet experiment had failed, or at least it wasn’t going to work in the short term. Penn announced it was cutting ties with ESPN after two years of mostly disappointing results. The online sportsbook had shown minimal improvement from its days as Barstool Sportsbook.
Penn recently pivoted to yet another brand — theScore Bet, another media property it already owned.
The short history of US sports betting is already littered with failed brands and platforms. We added ESPN Bet to the junk pile just two years after it launched.
4. Gambling tax deduction shenanigans
A funny thing happened when Congress passed a budget earlier this year: It changed how people will have to report their gambling winnings moving forward.
Previously, you could deduct 100% of your losses from gambling. A short passage in the larger budget bill made it so that you can only deduct 90% of your losses. That means, in theory, that you are paying taxes on money you don’t have. Not ideal!
This could be the end of the gambling industry in the US or a nothingburger, depending on whom you ask. Professional gamblers almost certainly will feel the pinch if this isn’t rolled back. How many recreational gamblers actually reported gambling wins and losses properly beforehand is a mystery, but I'll guess a large majority of them don’t and that the tax code won’t change their behavior.
Regardless, it’s still a major story. Efforts to change the tax code back to the way it was continue, but they haven’t gotten much traction. Will that change in 2026?
3. Sweepstakes casinos and sportsbooks face pushback
Late last year, sweepstakes sites were on a rocket ship to the moon. Fast forward to a year later, and the industry is facing an existential crisis.
Over the past year, a variety of states have told sweepstakes operators to either stop serving their jurisdictions or have been banned by legislatures. The biggest loss of course was California, where a prohibition takes effect tomorrow.
Where does the industry go from here? That’s TBD. The addressable market is still pretty big, but if more states come off the board, it’s not clear what happens next.
If you want more granular coverage of the sweepstakes industry, I recommend bookmarking Sweepsy, which does an excellent job with all of this.
Steve Ruddock has a breakdown of the latest news on sweepstakes to close out the year:
2. Sports betting scandals and negative PR
We had precious few major scandals over the first six years of expanded legal sports betting in the US. Then we got a deluge in 2025:
NBA player Terry Rozier was arrested for allegedly sharing insider information about his play that others used to bet.
A number of college basketball players were banned for alleged violations relating to sports betting and fantasy sports.
Two Cleveland Guardians pitchers were suspended and arrested for their alleged roles in a betting scheme.
The revelation of these stories across multiple sports in a relatively short timeframe led to backlash for the sports betting industry. There have been an almost infinite number of calls to ban all sports betting, or all prop betting, or live betting, or anything in between.
The idea that these cases were being uncovered precisely because of the regulated industry largely fell on deaf ears. The media also mostly ignored that there have been far bigger betting scandals in the US, well before the expansion of legal sports betting.
All of it fed into the idea that sports betting has become too pervasive in the mainstream, even as my No. 1 story stole more of the headlines…
1. Prediction markets, duh
Has there been a more disruptive moment in the history of US gambling than the rise of prediction markets? I know recency bias is at play, but it feels like the disruption is greater than anything else we’ve experienced.
The fall of the federal sports betting ban is probably still bigger (and perhaps poker’s Black Friday), but the legalization of sports betting didn’t happen overnight. The disruption of sports betting via prediction markets went from zero to 60 in almost no time flat. Most of the gambling industry (and the rest of the world) probably hadn’t heard of Kalshi and Polymarket before this year.
We went from prediction markets being a niche industry for betting on elections and other stuff to full-blown sports betting exchanges with billions of dollars in volume every week. Federal court cases are in various stages of figuring out the legality of all this in venues across the country. FanDuel and DraftKings launched their own prediction markets in a matter of months.
Where do we go from here? Who knows, but it’s sure to be a roller coaster.
I wrote an entire roundup of the top 10 stories in prediction markets, if you want even more!
Honorable mention
The stories that were big but didn’t make my top 5:
Online sports betting and casino revenue/handle hit new heights.
The rise of Fanatics Sportsbook
New York City to get new casinos
Missouri sports betting launches
No bills pass to legalize sports betting or online casino
Lottery couriers banned in Texas
I am sure I missed something as I sat here writing this on New Year’s Eve day… reply to this email if you want to yell at me.
Parent Toolkit
FanDuel’s Trusted Voices: Conversations About Betting is designed to equip adults with tools and resources to talk to young people about gambling.
This resource is a guide for parents and adult mentors, featuring details on today’s gambling landscape and guidance on how you can help. It includes information on different types of gambling activity, how adults can educate young people on the risks, and a list of resources.
Gambling news roundup
Online lottery sales, new casino on Indiana’s gambling docket (Indiana Capital Chronicle): “Proposals for allowing the Hoosier Lottery to sell tickets online and the opening of a Fort Wayne-area casino are in the cards for what could be Indiana’s biggest gambling expansion since sports wagering was legalized in 2019. Legislators started advancing the Fort Wayne casino plan in December and are expected to take up an online lottery bill soon after they return to the Statehouse in January.”
Florida Gaming Control Commission Doubles Down on Illegal Gambling (press release): The Florida Gaming Control Commission (FGCC) has intensified its illegal gambling enforcement efforts yielding impressive results. FGCC seized $14,474,336 and 6,725 illegal slot machines from illegal gambling during enforcement actions against illegal casinos in 2025 – a sharp increase from 2024 when $7,110,613 and 1,287 illegal slot machines were confiscated.
“I thank Governor Ron DeSantis and the Florida Legislature for their ongoing support of the Florida Gaming Control Commission,” said FGCC Executive Director Alana Zimmer. “Their actions strengthen Florida’s gambling laws and help protect our communities. FGCC has been working diligently to halt illegal gambling through enforcement actions across the state, demonstrating the dedication of FGCC’s law enforcement officers.”
Slot machines in illegal casinos are not tested or regulated by the state. Players have no assurance of fair play, accurate payouts, or basic consumer protections. Many players are taken advantage of by predatory owners. Illegal gambling operations also evade reporting taxes, which deprives local communities and the state of revenue.
Additionally in 2025, FGCC has increased its number of partnerships with local, state, and federal law enforcement agencies. FGCC entered into 29 new memoranda of understanding; magnifying the state’s crackdown on illegal gambling in 2025.
ESPN Employee Didn’t Violate Rules in $1 Million DraftKings Win (Front Office Sports): “ESPN researcher Mackenzie Kraemer did not violate company guidelines when he won $1 million in a DraftKings ‘best ball’ fantasy contest this week, a source told Front Office Sports. Kraemer, who has worked at ESPN since 2011, announced Monday that he finished second in a massive DraftKings contest, propelled by big performances from Bears receiver Luther Burden this week and Falcons running back Bijan Robinson all season. … While there was some chatter on social media about a perceived conflict of interest since DraftKings is the official sportsbook of ESPN, it bears mentioning that this was a season-long contest in which participants drafted their players prior to the NFL season—before ESPN unwound its sportsbook deal with Penn Entertainment and switched to DraftKings.”
WMU hoops player returns to court after being cleared in gambling probe (Detroit News): “Justice Williams made his long-awaited debut for Western Michigan basketball on Tuesday night after he was recently cleared as part of an NCAA investigation into suspicious gambling activity. Williams, a redshirt senior who transferred from Robert Morris, was suspended from team activities before the season began for alleged activity that was said to have occurred before he transferred to WMU.”
Who’s calling foul on sports betting tax? (Chicago Sun-Times)
Sportradar Data Reveals NFL International Betting Trends for the 2025 Season (press release): As the NFL’s global footprint expands, so does fan engagement, particularly around betting. With nearly 300 sportsbook partners worldwide, Sportradar analyzed global betting activity to uncover several notable trends tied to the NFL’s international growth:
The most bet-on international game this season was the Chiefs vs. Chargers matchup in São Paulo, followed by the Jets vs Broncos in London and Steelers vs Vikings in Dublin;
The NFL’s international slate delivered sharp growth in betting engagement, with betting tickets per game up 234% and average turnover (handle) per game increasing 54% on international contests;
Outside of the U.S. and Canada, the largest NFL betting markets by handle this season were Mexico, Norway, Germany, and Japan;
The most bet-on teams globally this season were the Chiefs, Cowboys, Bills, and Eagles, in that order;
Among international host markets, Ireland was the only country to see year-over-year growth in betting activity, posting a 62.66% increase in handle.
Massachusetts Sweeps Ban Bill Gets March 16 Reporting Deadline (Sweepsy): “Lawmakers have extended the reporting deadline for Massachusetts House Bill 4431 — which would ban sweepstakes casinos while legalizing real-money online casinos — to March 16, 2026, two months after the state legislature resumes action on Jan. 7, 2026. Massachusetts’ 2026 legislative session ends on July 31.”
Ifrah Law has been at the center of advancing iGaming in the U.S., shaping groundbreaking legislation, leading precedent-setting cases, and guiding clients that span the iGaming ecosystem through every phase of their business journey. Learn more at IfrahLaw.com.
Cool rundown of action at Caesars Sportsbooks this year:
The latest Substack from Danny Funt, who has a book out next year on sports betting:
Michigan Tribal CEO Sees Things To Like, Copy From Prediction Market Platforms (InGame): “In the moment, Joe S. Nayquonabe Jr.’s observations seemed akin to a velociraptor gazing skyward 66 million years ago and appreciating the beauty of the glowing object filling the sky. As part of a panel discussion on external threats to tribal gambling at the National Council of Legislators from Gaming States winter conference in San Juan, Puerto Rico, in mid-December, Nayquonabe Jr. saw more than an existential threat in prediction markets like Kalshi, Polymarket, and an ever-increasing roster from traditional sportsbooks. As a member of the Mille Lacs Band of Ojibwe in Minnesota, where he runs Soaring Eagle Casino & Resort, Saganing Eagles Landing Casino & Hotel, and the Eagle Casino & Sports online platform in Michigan, he said he chooses to leave the legality of prediction markets to others. But as a self-described ‘marketer at heart,’ he sees a lot to like in these insurgent platforms that tribal gambling companies have overwhelmingly lambasted as illegal incursions upon their operations and sovereignty.”
