The Current: CFTC Breaks Silence On Sports Event Contracts Via Prediction Markets
Gambling news roundup: Kalshi launches same-game parlays; Quintenz out as CFTC nominee; new bill in NY would prevent sportsbooks from limiting winning bettors.
The Current is a weekly report on a new development in the gambling industry from The Closing Line.
An advisory issued to divisions of the Commodity Futures Trading Commission finally acknowledged the existence of sports event contracts. H/t Sportico’s Dan Bernstein for being on the news first.
The advisory notes that companies involved in the prediction markets ecosystem should be prepared for having to deal with the possible “termination of sports-related event contract positions” based on state litigation and regulatory actions. A number of states have issued cease-and-desist letters to Kalshi for allegedly offering sports betting without a license. Kalshi is actively engaged in litigation with three states.
Goodwin Law attorney Andrew Kim, who has been following legal matters around prediction markets, broke down what the advisory could mean on LinkedIn:
It may be that the CFTC is simply being cautious about what could happen if prediction markets lose their preemption fight against the states.
But the advisory makes me wonder whether the current CFTC (i.e., a CFTC without new leadership) will support sports prediction markets in that preemption fight — or whether it will simply stay above the fray. A CFTC exercising this kind of prudence about parallel authority may not share the view of prediction market operators that the agency’s ‘exclusive’ jurisdiction should exclude the states.
If the CFTC is less a cheerleader and more of a bystander as prediction markets expand, that could certainly shape the future of the battle between the states and prediction markets.
Here are some of the key passages from the advisory… DCMs are designated contract markets (like Kalshi) and FCMs are futures commission merchants (like Robinhood):
“The Divisions are aware that certain registered entities and registrants are listing or facilitating the trading or clearing of sports-related event contracts, or may be interested in the future in doing so, and that there are market participants interested in trading these products. The Divisions are also aware of various forms of State regulatory actions and pending and potential litigation concerning the legality of sports-related event contracts listed on DCMs.
The Divisions are issuing this Advisory to caution FCMs, IBs, DCMs, and DCOs that State regulatory actions and pending and potential litigation, including enforcement actions, should be accounted for with appropriate contingency planning, disclosures, and risk management policies and procedures. The Divisions note that FCMs, IBs, DCMs, and DCOs should be prepared to identify such contingency plans, disclosures, and risk management policies and procedures as part of the routine registration, oversight, and examination activities of the CFTC and applicable self-regulatory organizations, including monitoring legal developments and have risk mitigation and contingency plans in place to deal with any developments that may affect customer, market participant, or clearing member positions and funds.
FCMs, IBs, DCMs, and DCOs should provide customers, market participants, and clearing members with regularly updated information, including information based on any States in which they operate or engage in activity, to ensure that such customers, market participants, and clearing members understand the possible effects should State regulatory actions or ongoing or new litigation, including enforcement actions, result in termination of sports-related event contract positions. Among other things, FCMs and DCOs should ensure that their customers and clearing members are aware of liquidation or close-out policies and procedures that the FCM or DCO may deploy for sports-related event contracts as well as how the FCM or DCO will handle any necessary disposition of customer or clearing member funds and property.”
You can see the whole advisory here:
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Other interesting passages from the advisory:
In a footnote, the advisory says “…at least one federal district court has found that the Commodity Exchange Act (‘CEA’) does not preempt the application of State gambling, wagering, and gaming laws to sports-related event contracts listed and traded on a CFTC-registered trading venue.” The CFTC doesn’t take a position on the ongoing litigation in the advisory.
In another footnote: “The Commission has not, to date, been requested to take or taken any official action to approve the listing for trading of sports-related event contracts on any DCM pursuant to … the CEA… All sports-related event contracts that are currently listed for trading on DCMs have been listed pursuant to self-certifications filed by the relevant DCM … and the Commission has not, to
date, made a determination regarding whether any such contracts involve an activity enumerated or prohibited under [the] CEA…”
It’s at least interesting for the CFTC to say this part out loud, even though it accurately reflects reality. Everything Kalshi and Crypto.com’s DCM have done so far on sports betting has come via the self-certification process.
Gambling news roundup
A bit of breaking news: Brian Quintenz is reportedly out as the nominee to lead the CFTC:
Kalshi has same-game parlays; this post is also a roundup of prediction markets news:
Flutter (FanDuel parent) and DraftKings both took a hit to their stock prices on the heels of the Kalshi parlay offering.
This Responsible Gaming Education Month, the AGA and our members are aligning around Play Smart from the Start — a new hub making responsible gaming education more consistent and accessible. Explore resources, share them with your networks, and join the industry’s collective commitment to leading on responsibility in gaming.
To get involved, explore the RGEM 2025 and Play Smart from the Start industry toolkits.
Analysis: Overall Massachusetts Sports Betting Player Limiting is Low, But Correlation Exists Between Winning and Limiting (Sports Betting Dime): “An analysis of Massachusetts sports betting player limitation data by the Massachusetts Gaming Commission set out to answer the question of whether sports bettors who showcase a tendency to win have their betting limits raised, while those who demonstrate a tendency to lose have their betting limits decreased? The answer to both, according to the Massachusetts Gaming Commission, is yes it does. The Massachusetts Gaming Commission today discussed the results of sports betting user limitation data, which showed that while a very small number of sports betting accounts are actually limited in the commonwealth, a clear correlation between consistent winning and harsher limitations does exist.”
My take: It’s extremely weird to include stories where I am a part of the news, but I am a consultant for the MGC, and I appeared on the meeting. Limiting is a hard issue, and I applaud Massachusetts for even trying to touch it.
I am for more transparency from the operators on limiting, and against setting standard minimums. The problem with making operators take minimum bets is they are clearly going to claw back any lost revenue by making everything else worse: promotions, vig, etc. The case I am going to make moving forward is that states should be trying to find ways to allow sportsbooks (and exchanges) that can or want to take sharp action into the state, rather than forcing recreational sportsbooks to do it. That policy choice should be coming into focus with the growth of national prediction markets.
Meanwhile, there’s now a bill in New York to stop sportsbooks from limiting or banning winning bettors. Bill summary: “Provides that mobile sports wagering operators and mobile sports wagering platforms are prohibited from limiting the size and frequency of deposits or wagers of authorized sports bettors because the bettor obtains financial benefit or due to the bettor’s waging activity; provides exceptions for suspicious wagering activity and indications of a gambling disorder; requires such operators and platforms to provide electronic written notice when an authorized sports bettor is limited or banned.”
Washington regulators send Bovada second cease-and-desist letter (SBC Americas): “The Washington State Gambling Commission has sent a second cease-and-desist letter to Bovada after the offshore operator ignored its first. The state gaming regulator announced it has followed up on its first C&D after the company failed to comply with demands to immediately cease operating in the state. A commission spokesperson confirmed to SBC Americas that it sent the first enforcement letter to Bovada on Jan. 10 but has not had any communication with the operator since, and said that the site is still operating in its market without approval.”
FanDuel swaps market access partner in West Virginia (SBC Americas): “After five years working with Greenbrier Casino Club as its market access partner in West Virginia, FanDuel is switching things up. The Flutter-owned brand announced earlier this month that Delaware North is the company’s new market access partner for online sports betting and iGaming operations in the Mountain State, working in tandem with Mardi Gras Casino & Resort. FanDuel will continue to operate the Greenbrier’s retail sportsbook even though the companies are no longer online partners. West Virginia Lottery confirmed to SBC Americas that the license between FanDuel and The Greenbrier extends only to brick and mortar sports betting.”
New Publishers Clearing House CEO vows to protect future prizes (SBC Americas): “Publishers Clearing House (PCH) has named former Facebook Director of Gaming Owen O’Donoghue as its new CEO, three months after mobile and social gaming company ARB Interactive acquired the sweepstakes company and amid an ongoing controversy about unpaid prizes. O’Donoghue spent his time at Facebook working with gaming companies across North America and Europe on strategic partnerships. ARB Interactive said he will lead a vision to revitalize the PCH brand with a mobile-first strategy and what the company called an approach rooted in trust and transparency. He will also be responsible for marrying PCH’s history of running the Prize Patrol sweepstakes contest with the mobile social gaming experiences offered by ARB’s Modo Casino.”
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.
Sports Betting Apps Have a Powerful New Tool to Keep Users Gambling (NYT, paywall): “In-game betting is predicted to grow to more than $14 billion by the end of the decade. It’s a huge part of the sports gambling industry. Public health officials worry that it could be increasing the risks for gamblers.”
Gordon Moody, Birches Health Launch Strategic International Collaboration (press release): “Gordon Moody, the UK’s leading charity dedicated to supporting those impacted by gambling-related harms, has entered into a landmark partnership with Birches Health, the foremost provider of specialized gambling addiction treatment in the United States. This collaboration establishes a trusted referral pathway between the two organizations, ensuring that individuals within their networks can access the right treatment in the right setting, including dedicated private admissions provision at Gordon Moody. In addition, Gordon Moody and Birches Health will exchange clinical expertise and best practice, strengthening the quality and innovation of care offered to those most in need.”
“By bringing together decades of Gordon Moody’s pioneering work with Birches Health’s reach across the U.S. the partnership reflects a shared commitment to developing a global standard of excellence in gambling addiction support. It creates new opportunities for individuals, wherever they are based, to benefit from proven, specialist pathways into recovery.“
Elliott Rapaport, founder and CEO of Birches Health, added: “Just as the American regulatory system has often looked to the more mature UK market for learnings, so too should leaders in the U.S. gambling addiction treatment ecosystem. We are excited to collaborate with such a respected and experienced organization like Gordon Moody to help ensure that modern models of clinical excellence are shared globally, and that individuals in need of specialized care can access it seamlessly, regardless of their location.”
BetHog Crypto Casino Unveils First AI Blackjack Dealer (Casino Reports): “The folks behind the crypto casino BetHog are doubling down on the use of cutting-edge technology in their product, as on Tuesday morning they announced the debut of the first AI-powered online casino blackjack dealer. Known as ‘Sunny,’ the dealer is an animated character who serves to blur the line between the popular form of online gambling known as “live dealer,” in which real people are dealing actual physical cards on a live video feed, and purely digital casino gaming, in which the cards and felt are all virtual (even if the money is real). As a press release explains, ‘Sunny offers players a fresh, interactive experience. Players can now interact with a dealer that greets them by name, remains engaged throughout each session, and is never tired.’ BetHog was founded in 2024 by FanDuel co-founders Nigel Eccles and Rob Jones…”
The New Normal Webcast: The Life and Legacy of Ernest L. “Ernie” Stevens (Wednesday 1 pm Eastern): “Ernest L. ‘Ernie’ Stevens Jr. dedicated his life to advancing tribal sovereignty, strengthening tribal gaming, and advocating for Native American tribes across the country. For more than two decades as Chairman of the Indian Gaming Association, Ernie was a tireless advocate whose leadership helped shape policy, protect tribal rights, and create opportunities that continue to benefit generations. His commitment extended far beyond gaming. He was a mentor, activist, and community leader who always put people first.”
“In this special edition of The New Normal, we honor Ernie’s extraordinary life and legacy. We’ll reflect on his contributions to tribal gaming, the relationships he built, and the enduring impact of his work for Indian Country. Help us celebrate the vision and passion of a leader who dedicated his career to serving others and advancing the future of tribal gaming.”
“Joining us for this tribute are Mark Macarro, President of the National Congress of American Indians, who will share reflections on Chairman Stevens’ political legacy, and his sons, Ernest Stevens III and Brandon Yellowbird Stevens, who will offer personal memories of their father and details about the upcoming memorial services. Together, they will help us honor not only Ernie’s leadership on the global stage but also the love and dedication he carried into his family and community.”
iDEA Launches New Content-Rich Website for All Things iGaming (press release): “iDEA (iDevelopment and Economic Association), the leading trade association representing the U.S. online gaming industry, today launched the definitive online destination for all things online gambling: ideagrowth.org. The new website provides the media, and U.S. legislators and regulators, a comprehensive resource for data-driven research, policy insights and responsible gaming resources. The new website provides the industry’s most vital statistics and research — from consumer protections to economic development — in an engaging, accessible format designed for maximum impact.”
“iDEA’s website launch comes at a critical moment in iGaming,” said iDEA Founder and General Counsel Jeff Ifrah. “In 2025, more states than ever considered iGaming legislation, creating strong momentum heading into 2026. With state budget shortfalls looming as federal funds recede, legal online gaming represents an untapped source of stable tax revenue — while also displacing the unregulated, unsafe offshore markets that currently dominate the market.”
“The new iDEA website’s key features include:
Research Library: Independent studies and economic analysis of iGaming.
State-by-State Tracker: U.S. maps showing where iGaming and online sports betting are legal.
Responsible Gaming Tools: Information on the safeguards and technologies used to protect consumers, including self-exclusion programs, financial protections and problem gambling resources.
News and Advocacy Updates: Industry news and policy developments to keep stakeholders informed about the rapidly evolving U.S. iGaming landscape.”
Former Catena Media CEO Michael Daly joins Aristocrat as SVP (Next.io): “Aristocrat has appointed Michael Daly as its new senior vice president of business development and strategic execution, marking a high-profile addition to the company’s leadership team as it accelerates international growth. Daly, who stepped into the role in September and announced the move on LinkedIn, will be based in Las Vegas. In his new position, Daly is tasked with spearheading global growth initiatives, leading business development strategies, and optimising customer experiences across Aristocrat’s diverse portfolio.”
My take: Stoked for Michael, who is my former boss and one of my favorite bosses.
Caesars’ Progressive Jackpot Up to $500,000 as MLB Playoffs Begin Tuesday (Covers): “With the MLB postseason beginning on Tuesday, Caesars is offering a $500,000 progressive jackpot for all of its customers. The half-a-million-dollar prize was reached after there were zero no-hitters recorded during the entire MLB regular season. The Fastball Fortune progressive jackpot began at $25,000 at the start of the 2025 MLB season and increased by $25,000 for every week that passed without a no-hitter.”
Metropolitan Park is fourth and final New York casino bid to advance (iGB): “After several years of work, millions spent on lobbying and many hours of public hearings, the downstate New York casino race has been whittled to four applicants ahead of its final phase. Metropolitan Park, the $8 billion mixed-use casino complex adjacent to Citi Field in Queens, was approved 6-0 by its appointed community advisory committee (CAC) Tuesday morning. The bid is a joint venture between New York Mets owner Steve Cohen and Hard Rock Entertainment.”
‘White Lotus’ Star Patrick Schwarzenegger Stars In New Fanatics Casino Ad Campaign (Casino Reports): “We don’t recommend getting all messed up on drugs with your younger brother and regrettably playing online casino together and then waking up horrified by what you’ve done. But, if you’re going to do that, you may as well do it on Fanatics Casino. That is very much not the narrative of the new Fanatics Casino ad campaign, but, hey, when you build a commercial around Patrick Schwarzenegger lounging in a pool like he’s on vacation at a White Lotus property, you’re kinda begging people to go there in their minds.”
Newsletter corner
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.