The Early Line: DraftKings Eyes M&A In Prediction Markets
Gambling news roundup: Kalshi has spent $1M on lobbying efforts; MLB legend Derek Jeter signs with BetMGM; final table set for World Series of Poker main event.
The Early Line offers a look at the top stories heading into the week, along with some analysis.
DraftKings in Talks to Acquire Prediction Market Railbird Exchange (Front Office Sports): “DraftKings is currently in acquisition talks with Railbird Exchange, an upstart prediction markets platform which recently gained federal licensure, a source told Front Office Sports. Financial terms were not known, and a deal has not been finalized.”
“DraftKings speaks to a variety of companies regarding various matters in the normal course of business, and it is our general policy not to comment on the specifics of any of those discussions,” a spokesperson for the sportsbook told FOS in a statement.
Reading the line: Everyone has been talking to everyone over the past few months when it comes to prediction markets. The above is definitely news, but I am sure that DraftKings and FanDuel have kicked the tires on almost any option when it comes to how they approach prediction markets.
If I am DraftKings or FanDuel, I would be prioritizing how to do prediction markets myself rather than partnering with Kalshi. I am not sure why sportsbooks would plug into Kalshi and help them become the dominant force in federally regulated sports betting if there is some path to do it without them. Maybe working with Kalshi is how DraftKings and FanDuel initially enter the market, but it could prove short-sighted.
Railbird is particularly interesting for DraftKings (or anyone looking to get into sports betting prediction markets), as it’s a green-field opportunity. Railbird just got approval from the Commodity Futures Trading Commission and isn’t even live yet.
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.
Slot reporting threshold increased to $2,000 (Straight to the Point newsletter): From the American Gaming Association’s weekly update: “‘President Trump signed the One Big Beautiful Bill Act, delivering significant achievements for gaming including the slot tax reporting threshold increased to $2,000 and automatic inflation adjustments—a crucial first step toward modernizing outdated tax policies.’ The change is apparently covered in the part of the bill that changed certain payments to persons engaged in a trade or business and payments of remuneration for services. This is short of the hoped-for $5,000 threshold the AGA and other supporters desired, but it’s still the first increase since the slot reporting threshold was introduced in 1977.”
Reading the line: The American Gaming Association has taken some heat for not pushing back more vociferously on the change that only allows taxpayers to deduct 90% of gambling losses. In reality, navigating Congress is not a job for the faint of heart. The AGA clearly wanted to make sure the slot reporting measure got through — a modernization that’s important to a lot of AGA members — without ruffling feathers otherwise. Had the AGA loudly objected to the gambling loss deduction, it could have risked worse outcomes. (For instance, losing the win on slot reporting while the gambling loss change also stayed.) You can take issue with that strategy, but the AGA was not working solely on a binary outcome on the gambling loss deduction. Now the AGA and other interests will hope they can fix the deduction issue through Rep. Dina Titus’ bill or other means — like a technical correction bill — later this year.
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More gambling news
Kalshi Has Spent $1 Million On Federal Lobbying (The Event Horizon): “Kalshi has spent more than a million dollars on federal lobbying, according to data at OpenSecrets.org. While that amount is a drop in the bucket in the vast lobbying ecosystem, it’s worth highlighting for a couple of reasons … Former US senator Blanche Lincoln, who received lobbying payments from Kalshi in 2024, just penned a letter to the Commodity Futures Trading Commission supporting the expansion of prediction markets into sports betting. That letter also seems to try to rewrite the legislative intent on event contracts and gaming.”
Don't let prediction markets bypass Iowa's gambling laws (Des Moines Register, op-ed by AGA president Bill Miller): “For years, Iowa has taken a thoughtful, responsible approach to gambling regulation. From brick-and-mortar casinos to the more recent legalization of sports betting, the state has developed a framework that balances consumer access with public accountability. Iowa’s laws are clear: legal gambling requires licensure, transparency, and a commitment to responsibility. That framework is now under threat from a new wave of so-called “prediction market” platforms, which are federally registered exchanges under the Commodity Futures Trading Commission (CFTC). But make no mistake: many of these platforms offer gambling products, not financial ones.”
The Cashout: Hold For US Sportsbooks Almost 13% In Early June Numbers (The Closing Line, paywall with free roundup): “The initial metrics for US sportsbooks in June make it appear that Q2 will end up being very good for operators.”
Final Nine Players Set For The 2025 World Series of Poker Main Event Final Table (WSOP): “Out of 9,735 total entrants in the third-largest World Series of Poker (WSOP) Main Event in history, only nine players remain as the lineup is set for the 56th annual WSOP Main Event final table. John Wasnock, Michael Mizrachi, Braxton Dunaway, Kenny Hallaert, Leonor Margets, Luka Bojovic, Adam Hendrix, Daehyung Lee, and Jarod Minghini will return to the Horseshoe and Paris in Las Vegas, Nevada, on Tuesday, July 15, with each player eyeing not only the $10 million top prize and WSOP Main Event bracelet, but a chance at forever solidifying their names in poker history. Duking it out over eight days of poker action, the resilience of the nine remaining players has earned them a seat at poker’s most prestigious final table.”
Analyst: Two ‘Long-Term’ Gaming Stock Winners; Hold On DraftKings (Legal Sports Report): “Steven Pizzella of Deutsche Bank called the sports betting data providers winners while advising investors to hold on the DraftKings stock in a recent note. Pizzella raised targets on multiple sports betting and online casino stocks based on the industry outlook and momentum for the next 12 months:
DraftKings: $37, hold
Genius: $13, buy
MGM Resorts: $50, buy
Sportradar: $34, buy
Morgan Stanley: DraftKings set to lead Q2 gaming earnings beat (Next.io): “DraftKings is set to lead Q2 2025 earnings, with analysts forecasting a significant beat driven by robust online sports betting (OSB) and accelerating iGaming revenue. Analysts at Morgan Stanley estimate the company will report adjusted EBITDA of $260m, well above the $225m consensus and DraftKings’ own guidance of $200m.
According to Morgan Stanley’s latest industry preview, OSB handle grew 11.5% year-over-year in Q2 2025, while gross gaming revenue (GGR) rose 13%.”
Caesars Entertainment Bolsters Online Casino Live Dealer Offering with the Launch of Branded Live Dealer Studio in Michigan (press release): “Caesars Entertainment, Inc. today announced the launch of its third branded online casino live dealer studio, available now to players on Caesars Palace Online Casino, Horseshoe Online Casino and Caesars Sportsbook & Casino in Michigan. Developed in partnership with Evolution, the new studio reinforces Caesars’ commitment to delivering world-class, immersive experiences across its online platforms, inspired by the iconic atmosphere of its Caesars Rewards® destinations. The debut of the new studio marks Caesars' third branded live dealer studio that has opened in 2025 and draws inspiration from table game play at the Las Vegas Strip’s most iconic casino, Caesars Palace. Its opening follows the successful launch of Caesars’ first branded studio with Evolution in Pennsylvania in January. In April, the Company also debuted its first studio inside a Caesars Rewards destination at Tropicana Atlantic City in New Jersey.”
“Our third live dealer studio expands our fully customized live dealer experience that is already extremely popular in Pennsylvania and New Jersey into another key jurisdiction where our online casino platforms are live,” said Matthew Sunderland, Senior Vice President and Chief iGaming Officer at Caesars Digital. “The studio design takes inspiration from our flagship destination, Caesars Palace, to authentically recreate the atmosphere of Las Vegas for online players. We look forward to our Michigan players enjoying the new experience.”
Derek Jeter Joins BetMGM's Team of Legendary Ambassadors (press release): “BetMGM, a leading sports betting and iGaming operator, today announced a multiyear partnership with baseball legend and five-time World Series champion Derek Jeter. As BetMGM's newest brand ambassador, Jeter will appear in upcoming national marketing campaigns including the "Legendary Plays" spot, scheduled to premiere Tuesday, July 15. BetMGM Casino also plans to launch an exclusive Jeter-themed slot game. Currently, there are no other online casino games featuring a current or former professional baseball player.”
"BetMGM's commitment to excellence and overall approach help them stand out as an innovator in their space," Jeter said. "They have worked hard to create a real community in their audience. I look forward to working with their team to build connections within their base of players and support the company's continued growth."
“The Hall of Fame shortstop joins BetMGM's prestigious roster of sports legends, which includes Barry Sanders, Tim Howard and Wayne Gretzky, among others. Jeter will be featured prominently across advertising campaigns and digital platforms, make appearances at exclusive VIP events and play a key role in promoting BetMGM's responsible gambling initiatives in both the United States and Canada.”
Casey Hurbis, Chief Marketing Officer, BetMGM, said, "As BetMGM's brand continues to evolve, we could not think of a better baseball ambassador to add to our Mount Rushmore of legendary athletes than Derek Jeter. 'The Captain's' universal appeal and proven track record of excellence, both on and off the field, will provide players with extraordinary experiences only available at BetMGM."
You can see the commercial here:
SGLA: California Assembly Bill 831 Threatens Businesses Across California with Criminal Liability (Social Gaming Leadership Alliance press release): “California Assembly Bill 831 (AB831) proposes a sweeping ban on online social games which utilize sweepstakes promotions. If enacted, the bill would not only deny millions of Californians access to the safe, free-to-play games they enjoy and close off a potential revenue stream for the state, but it would also expose a wide range of legitimate businesses to unprecedented criminal liability. Backed by gambling interests seeking to eliminate perceived competition, AB831 was introduced through a last-minute “gut-and-amend” maneuver near the end of the legislative session, subverting proper process and allowing for little discussion, debate or consideration of potential unintended consequences.”
“This rushed proposal not only cuts Californians off from the free-to-play games they enjoy and a potential revenue stream for the state, but it also threatens to criminalize the businesses that drive California’s economy,” said Social Gaming Leadership Alliance (SGLA) Executive Director and former Congressman Jeff Duncan. “We urge California lawmakers to take California businesses out of the crosshairs by making AB831 a two-year bill, allowing for a more thoughtful, consultative and collaborative process.”
Super Group an attractive bet in online gambling, says Citizens (Next.io): “Analysts at Citizens JMP have initiated Super Group coverage with a Market Outperform rating and $15 price target, citing the company’s dominant African position and strong cash generation prospects.”
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.
