The Cashout: Hold For US Sportsbooks Almost 13% In Early June Numbers
Gambling news roundup: Analyst says increasing probability Penn opts out of ESPN Bet deal; gambling tax change gets tons of mainstream coverage; the week in news around prediction markets and Kalshi.
TCL provides market analysis in the US gambling space in The Cashout every weekend to paid subscribers, along with a news roundup for free subscribers.
The initial metrics for US sportsbooks in June make it appear that Q2 will end up being very good for operators.
But first, the gambling news roundup:
Gambling news roundup
Stifel: ‘Increasing Probability’ Penn Exits ESPN Bet Deal (Legal Sports Report): “New directors for Penn Entertainment makes it more likely the company opts out of its deal with Disney for ESPN Bet, according to Stifel. Analyst Jeffrey Stantial maintained his hold rating on Penn but increased his target price to $19 from $17 based on slightly higher second quarter estimates and a positive shift for gaming stocks. One main focus for Penn’s Q2 earnings call on Aug. 7 will be the messaging around both online sports betting and online casino. Stantial noted the first quarter call shifted away from sports betting with more of a focus on casino, and thinks a similar focus on the Q2 call could be more telling of “potential shifts in strategy,” including opting out of the Disney/ESPN Bet partnership in late 2026.”
“On the Interactive front, we see increasing probability PENN exits the ESPN Bet relationship, though likely priced into shares already with overly conservative expectations for long-term iCasino market share,” Stantial said in Thursday‘s note.
Gambling tax change keeps getting mainstream coverage: “The Big Beautiful Bill provision that only allows taxpayers to deduct 90% of their gambling losses has captured significant attention in a short amount of time. In recent days, we’ve seen reports from lots of heavy hitters:”
My weekly roundup on all things prediction markets:
Kalshi Investigates Improbable $162,000 MLB Betting Flurry (InGame): “Kalshi is reviewing $162,000 worth of baseball trades placed during a 12-second window — including many at improbable odds — the exchange revealed last week. In a short exchange notice issued July 3, Kalshi wrote: ‘Pursuant to its Rule 5.10 (‘Trade Cancellations’), KalshiEX LLC hereby gives notice that trades made between 8:00:26 ET and 8:00:37 in KXMLBGAME markets are currently under review under Rule 5.10(c).’ InGame became aware of the notice – which was posted the same day the trades occurred — via a Thursday Discord post.”
On Friday, Kalshi posted a notice that the prices on these contracts were being changed; you can see that document here.
It seems more than likely this was just an error by a bot, but it still likely raises some eyebrows, including with the leagues watching how prediction markets are playing out.
He Claims He’s the ‘Sports Betting King.’ What Are the Odds? (NYT, paywall): “Mazi VS has become a major influencer by flaunting his expensive lifestyle and his big-winning wagers. Other gamblers say he can’t be what he seems.”
NCLGS: Litigants exchange fireworks in prediction market rift, but imminent resolution not expected (iGB): “At one end of the dais sat Joshua Sterling, an attorney representing Kalshi who formerly was director of the Market Participants Division at the U.S. Commodity Futures Trading Commission. At the other sat Michael Hoenig, an associate general counsel of gaming for Yuhaaviatam of San Manuel Nation, a California tribe. San Manuel is among the large coalition of tribes and tribal organisations that has filed amicus briefs in state suits against Kalshi.”
US Sportsbooks Sound Alarm About Tax Increases (Covers): “Major U.S. sportsbooks continue warning about increased taxes on their bottom lines, telling policymakers these growing fees could threaten the legal industry’s long-term survival. … FanDuel head of state government relations Cesar Fernandez said Friday that, industry-wide, the average sportsbook operator makes $1.55 in realized profit for every $100 wagered. Speaking at the National Council of Legislators from Gaming States (NCLGS) conference, Fernandez said that a modest increase in taxes and/or marginally stronger performances by winning bettors would make operators' sportsbook offerings unprofitable. Fernandez said FanDuel has paid more than $5 billion in taxes since 2018.”
“We view ourselves not just as a net contributor to these states but also a partner in their state funding,” Fernandez said. “But (more recently) we've had a little bit of a narrative shift as we're engaging with policymakers throughout the country, and that's now ‘tax gambling companies, they can afford it.’
Bonta’s bad bet: Fantasy sports ban could further alienate young male voters (SF Chronicle, paywall)
AGA Announces Gaming Hall of Fame Class of 2025 (press release): “The American Gaming Association (AGA) today announced the 2025 inductees into the Gaming Hall of Fame, recognizing three individuals whose careers have profoundly shaped the legal gaming industry:
David Berman, Co-Head of Macquarie Capital, Americas and Global Head of Consumer, Gaming & Leisure
Ann Simmons Nicholson, Founder and CEO, Simmons Group
Charles Lombardo, Former Senior Vice President of Gaming Operations at Seminole Hard Rock Gaming, and former Senior Vice President of Slot Operations for Caesars Palace, Bally’s and Paris Las Vegas.”
“The Gaming Hall of Fame honors the visionaries who’ve shaped today’s gaming industry,” said AGA President and CEO Bill Miller. “David, Ann, and Charlie have each made lasting contributions to the growth, integrity, and leadership of legal gaming, and we’re proud to recognize their impact.”
FanDuel’s Trusted Voices: Conversations About Betting is designed to equip adults, including parents and coaches, with tools and resources to talk to young people about gambling, including information on warning signs, risks and proxy betting. The program is led by retired professional basketball player Randy Livingston and his wife, basketball agent Anita Smith, who share their personal stories related to problem gambling, with the hope of preventing others from experiencing similar harms. Learn more and join the conversation here.
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The Cashout
Here’s what’s on tap for paid subscribers:
Early June reports for US sportsbooks, including overall metrics and brand-level data
ESPN Bet opt-out watch
App download rankings
June US sports betting
The first few states that report online sports betting metrics each month are in, and we have a decent early look at what June will look like.
The main takeaway: Hold is very good. For reporting states, hold sits at 12.9% so far. With all states we have reporting so far, blended hold for Q2 sits at 10.5%. If that figure holds at that rate, pun intended, it will be the highest hold in a single month in US history.
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