The Takeaway: Adapt To Gambling's New World Order, Or Get Left Behind
Gambling news roundup: March Madness betting takes off in earnest in 50 states; High 5 told to leave Maryland; Arkansas eyes legal online casino.
The headline is meant for a lot of audiences. Policymakers. Regulators. Law enforcement. Operators. Vendors. Startups. You name it.
If you told me in 2018 that seven years later we would be talking more about quasi-regulated or unregulated gambling than regulated gambling in the US, I would have looked at you like you were a space alien.
But this is the world we live in. While both legal and offshore gambling are still big business, it’s everything else that’s for the most part onshore that is attracting just as much attention.
PrizePicks now has a fantasy sports business that rivals that of DraftKings and FanDuel in the 2010s and is bigger than some sportsbooks. There are dozens of operators that operate fantasy pick’em/parlays in dozens of states.
Sweepstakes casinos and sportsbooks are a huge business in the US and are trying to survive a push to ban them in many states (whether you think they deserve to be classified as gambling or not). There are more than a hundred of these, with more on the way.
As has been well-documented here and elsewhere, Kalshi and Robinhood are now offering sports gambling in 50 states. If you think this is stopping with a limited offering and a few platforms, please keep kidding yourself.
Fantasy has settled into equilibrium. Sweepstakes are facing pushback but are favorites to survive in many of the states they serve. No one has any idea what to do about Kalshi. Is it a threat or an opportunity? Do you want to shut it down or join in the party?
So, what do you do? Do you shrug your shoulders and say “what can we do?” Do you push to regulate or ban everything that’s not technically legal? Or do you take advantage of the climate and the chaos to bring about change and/or generate revenue?
These are the questions confronting nearly every part of the gambling ecosystem today. And it’s become increasingly hard for me to tell everyone with a straight face just to sit it out. If policymakers and regulators aren’t willing to get involved, we’re going to see more and more companies and activity in the quasi-regulated space. And it’s hard to blame them.
If I am DraftKings and FanDuel, and it’s now open season for sports betting in every state because of Kalshi and the Commodity Futures Trading Commission, can we realistically say “Tsk, tsk, NO YOU CAN’T DO THAT”? If this is the new world order, they (and others) are going to have to get involved at some point, whether they want to or not. (And they probably want to, given the increase in the addressable market it provides for sports gambling.)
This is a post by the CEO of betting exchange Sporttrade, Alex Kane, directed at the policy and regulatory side of things. It’s hard to argue with Alex:
Open Letter to US Sports Betting Legislators and Regulators: “As I stated above, something absolutely needs to change in how you approach achieving your goal. The data shows that next to no new companies, new ideas, nor venture capital are coming into your markets. Instead, the incredible phenomena that is American ingenuity is skipping your frameworks entirely, and going to where it’s more fair, welcome, and open. Just ask yourself, how many venture-backed startups operate in your regulated market?”
When I see state policymakers and companies hemming and hawing over whether x form of gambling should be legalized, it’s almost comical to me. Have you taken a look at how permissive the landscape is in the US right now?
Adapt and/or be an agent of change. Otherwise, you’re risking being left behind as a footnote in the history of US gambling.
The Event Horizon
Here’s everything you need to know about the world of prediction markets, via the weekly roundup at The Event Horizon:
And some more on prediction markets:
You can now make March Madness bets on Robinhood. Will regulators allow sports contracts at more brokerages? (Marketwatch): “‘Expansion into sports contracts is a blatant attempt to push gambling into regulated financial markets by disguising it as derivatives trading,’ Cantrell Dumas, director of derivative policy at advocacy group Better Markets, wrote in an email to MarketWatch.”
Preach, Geoff: Ides of March Madness: Prediction Markets, Sweeps Make States' College Sports Betting Rules Irrelevant (Covers.com): “So a Kalshi user in New Jersey could buy or sell event contracts tied to the college basketball games played in Newark later this month, making or losing money depending on the outcome and their trading skills. This would happen despite the state’s voters saying they do not want that sort of thing going on.”
College betting is banned here in DraftKings, but I am definitely betting on the games today at Kalshi.
Gambling news roundup
Bill filed to expand online gambling in Arkansas (Arkansas Times): “A bipartisan group of state lawmakers filed legislation Wednesday that would legalize online casino gambling for the three licensed casinos in Arkansas and make it a felony to operate unlicensed online casinos or sportsbooks in the state. … It’s been referred to the House Judiciary Committee but likely won’t get a hearing until April, when the Legislature returns from its spring bring next week. (An identical companion bill in the Senate was withdrawn Thursday by its sponsors.)”
This is another bill that would ban sweepstakes casinos and sportsbooks. We again reset the timer waiting for a day with no bad news for sweeps operators.
Also, Maryland regulator tells High 5 Casino to shut it down (SBC Americas): “Less than a week after it ordered VGW to stop doing business in the state, Maryland’s gaming regulator has sent the same message to High 5 Casino. The Maryland Lottery and Gaming Control Agency (MLGCA) sent a cease-and-desist letter this week to High 5 Entertainment, doing business as High 5 Casino. The letter, which was viewed by SBC Americas and is dated March 18, accuses the company of ‘offering and conducting online gaming activities in Maryland without legal authority to do so.’ ‘Online casino gaming (also known as iGaming) is not permitted in Maryland and an online operator is prohibited from offering any casino gaming unless licensed by the Commission,’ added the MLCGCA’s Managing Director of Gaming, Michael Eaton, in the notice.”
Navy veteran won close to $400,000 on BetMGM only to have his bet mysteriously canceled (The Independent): “A U.S. Navy veteran who won close to $400,000 on an NBA game had his bet canceled after BetMGM cited an ‘obvious error.’”
I am sympathetic to sportsbooks on palpable errors, but this is a rough look. This is arguably the price of the bill coming due on pushing more and more people to betting on parlays. You might have to eat this for optics if you are BetMGM.
South Carolina bill could legalize sports betting (Carolina News & Reporter): “A new House bill introduced by Rep.Chris Murphy, R-Dorchester, in South Carolina seeks to legalize sports betting in the state. The bill proposes the creation of the South Carolina Sports Wagering Commission, implementing a privilege tax, and setting up a licensing system for operators, among other provisions.”
South Carolina feels like it will be a big lift, given the historical resistance to gambling.
This deserves to be said in any state that has fantasy pick’em and no sports betting, tbh: “University of South Carolina student Matthew Rollings places bets through the Prize Picks app. ‘I do it just to keep myself interested in the game. It gives me a reason to watch because some nights I don’t care about those games, but putting a little money on the line gives me something to root for,’ Rollings said.”
I am just sharing these for the headlines:
Gambling newsletters
The EKG Line: “We estimate $2.63bn will be bet on March Madness in 2025–down 2% from our projection last year and below some other public estimates.”
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