The Current: How Much Push Back Will We Get On Kalshi Sports Betting?
Rep. Dina Titus joins the American Gaming Association in saying nationwide sports prediction markets should not be allowed ahead of a CFTC roundtable
Are sports prediction markets the devil, or an opportunity to be grabbed by the horns? It depends on whom you ask.
Rep. Dina Titus (D-Nevada) voiced her displeasure in a letter to the Commodity Futures Trading Commission. You can see a blurry version of her letter here; she wrote in a tweet:
I contacted CFTC with my concerns about legalizing prediction markets on sports-related contracts. It is a backdoor way to allow sports betting in 50 states, ignoring consumer protections, responsible gaming, integrity monitoring, and state tax revenue rules and regulations.
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That comes after the American Gaming Association also decried sports prediction markets as having the potential to usurp the regulated sports betting industry.
As we get closer to the planned CFTC roundtable on prediction markets, it will be interesting to see what other interests make their opinions known on sports event trading:
Sports betting operators: While the AGA represents the gambling industry writ large, it remains to be seen how the regulated sportsbooks themselves will approach this. While some sportsbooks may see it as competition, it’s also possible to see it as a way to expand their reach into states without legal sports betting. DraftKings CEO Jason Robins took the middle ground in a recent earnings call, saying it wasn’t a “threat” while noting it could increase the total addressable market.
State law enforcement, policymakers and regulators: This one can cut both ways:
States with legal and regulated sports betting now have new competition at the national level, and Kalshi et al wouldn’t have to worry about their regulatory or taxation regimes.
Similarly, states with no legal sports betting suddenly have a gambling option, with no oversight or benefit to them.
It’s hard to imagine many interests at the state government level would back sports event trading.
Sports leagues: Will the major US and international sports leagues and/or the NCAA get involved in the short term? Or will they sit it out while they figure out what will happen next? The leagues have been quiet, even though betting on futures (and sometimes on matches, see below) has started in many sports at Kalshi.
One line of thought is that the leagues might not mind the disruption, which could lead to the federal framework they’ve long desired. At the same time, a national, unregulated sports betting business cropping up overnight is also subideal for them.
The NCAA is not likely to be quiet on the issue, as they have been pushing for bans or limitations on types of bets in the regulated markets.
Keep up with prediction market news more granularly at my other newsletter, The Event Horizon:
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Gambling news today
Governor Abbott Directs Texas Rangers To Investigate Two Texas Lottery Incidents (press release): Governor Greg Abbott today directed the Texas Rangers to investigate two incidents involving the Texas Lottery, including a bulk purchase of lottery tickets in April 2023 and the recent $83.5 million win through a courier service. “Texans must be able to trust in our state's lottery system and know that the lottery is conducted with integrity and lawfully,” said Governor Abbott. “Today, I directed the Texas Rangers to fully investigate these incidents and identify any potential wrongdoing. Texans deserve a lottery that is fair and transparent for everyone.”
The move came as the Texas Lottery moved to ban lottery couriers and Jackpocket pulled out of the state yesterday. DraftKings went from a nice story about someone winning a jackpot on their Jackpocket platform to having to deal with a state law enforcement investigation in the space of a week.
Inside the Gambling Ring Allegedly Linked to Point Shaving Across Pro and College Basketball (SI): “The scandal, which appears to touch both pro and college basketball, has already generated a few headlines, but the sports world has not come to grips with just how widespread this scheme could be. In a court filing last month, the office of acting U.S. Attorney Carolyn Pokorny of the Eastern District of New York vouched for “substantial evidence” that Hennen was involved in ‘illicit financial transactions and fraudulent sports wagers totaling millions of dollars,’ resulting ‘in potentially millions of dollars’ worth of illicit profits and money-laundering transactions.’”
Kalshi dives into tennis: The prediction market platform’s most aggressive sports betting markets to date went live this week. Kalshi is listing early-round matches for ATP and WTA tournaments that are underway.
Kalshi jumping headfirst into the one sport that generally has the most integrity concerns is an interesting decision. Granted, the danger of match-fixing is far less at top-level events. I counted 25 single tennis match markets on the app.
Gaming Control Board issues cease-and-desist letter to BetNow (MGCB): The Michigan Gaming Control Board (MGCB) has issued a cease-and-desist order to BetNow.eu Sportsbook, Casino, and Racebook (BetNow), an offshore online casino operating illegally within the state. The site offers a range of casino games, including slots, poker, and live dealer options such as blackjack, roulette, and craps, as well as betting services for sports events and horse races. “This unlicensed operator not only violates Michigan law, but also exposes consumers to significant risks,” said MGCB Executive Director Henry Williams. “Our job is to protect Michigan residents by ensuring that all online gambling is conducted legally and responsibly.”
Michigan continues to print the roadmap of offshore operators for other states to target.
More sweepstakes casinos exit Maryland and West Virginia (SBC Americas): “McLuck and Hello Millions have added Maryland and West Virginia to their respective list of prohibited states and three others — Jackpota, Spree and Mega Bonanza — have pulled out of Maryland, effective Feb. 21. All five of those brands currently block users in at least 12 states.”
It will be interesting to see if state exits start being done en masse rather than piecemeal. Social and Promotional Gaming Association members and non-members alike have been adjusting what states they serve ad hoc in recent weeks. That could lessen pressure on those operators in particular, but it doesn’t necessarily change the environment in a given state, when dozens of other operators may still serve a jurisidiction.
Hawaii digital sports betting bill heads to house floor (iGB): “An amended version of HB 1308 received committee approval, but at least six members voted “with reservations”. Finance was the third and final Hawaii house committee to pass the bill, which now moves to the house floor. A companion bill, SB 1569, is set to be heard in the Senate Ways and Means Committee on Wednesday.”
Gambling newsletter roundup
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