The Takeaway: Companies Will Keep Finding Ways Around Your Online Gambling Laws
Roundup: Novig raises $75 million; New Jersey sports betting January numbers are out; Caesars stock is up on earnings report; Kambi and Rush Street Interactive announce Q4 as well.
I’ll be speaking at Next Summit New York in a few weeks. Get your tickets here, and use code TCL0L10FU3V for a 10% discount.
The Takeaway is a weekly commentary on trends and news in the gambling industry. This newsletter was sent to 5,002 subscribers!
I think there are two enduring lessons of the past decade of online gambling in the United States:
People really like to gamble on sports and online.
People will find ways to bet on sports — or offer sports betting — no matter what the law says about sports betting.
Prediction markets are just the latest — and biggest — example of both of these trends.
This post on LinkedIn kind of drove home the point for me… I didn’t know “hemp-derived THC” was even a thing before getting tagged here.
Prediction Markets and Hemp-Derived THC: Surprised we’re not talking more about the similarities between these upstart industries.
Both are challenging their "mature cousins" (Regulated Cannabis and Online Sports Betting) with a similar playbook: Use federal loopholes to bypass state-by-state licensing, avoid massive vice taxes, and scale fast.
Why would you sign up for paying licensing fees and increasing gambling taxes while abiding by often onerous state-by-state regulation today, if you’re not already in the sports betting business? I honestly have no idea.
That’s at least part of why we’re seeing contraction in the number of operators in the US sports betting space, rather than growth.
Prediction markets do have to deal with federal regulation, but they also don’t have to deal with dozens of state regulators (well, other than in court) or pay any of the taxes that sportsbooks do.
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Look no further than Novig for a textbook example of the dynamic playing out in real life.
Novig was trying to make it as a state-regulated sports betting exchange just two years ago.
It pivoted to a sweepstakes model in 2024, and raised $18 million last year.
It announced it was registering to become a federally regulated prediction market in January.
Today, Novig raised $75 million in a Series B round. More from the press release:
Novig, the fastest growing sports trading platform in America, today announced the close of a $75 million Series B round led by Pantera Capital, with participation from Multicoin Capital, Makers Fund, Edge Equity, and existing investors Forerunner, Perceptive Ventures, and NFX. The round brings Novig’s total capital raised to more than $105 million.
The funding follows a period of growth for the platform, which reported a 10x increase in trading volume during 2025. Novig’s annualized trading volume currently exceeds $4 billion.
Although sports account for the majority of activity on most prediction market platforms, those products are not built with sports traders in mind. Novig, by contrast, is built for sports fans, delivering a fair, transparent, and commission-free trading experience.
Since launch, the platform has rapidly emerged as the leading sports trading platform in the U.S., proving strong demand for a trader-first alternative to traditional sportsbooks. Novig has officially submitted its application to the Commodity Futures Trading Commission (CFTC) to become a licensed Designated Contract Market (DCM), a critical milestone in its transition toward becoming a federally regulated exchange available in all 50 states. …
“Our mission is to democratize and financialize sports markets, and we’re proud of the fact that Novig users are 10 times more likely to win than on traditional sportsbooks,” said Jacob Fortinsky, Co-Founder and CEO of Novig. “We chose to partner with the best crypto venture firms in the world to further accelerate our plans to make Novig the most efficient and liquid sports prediction market in the world. Others are using prediction market technology to financialize new markets with unproven demand. We leverage it to fix broken markets where demand already exists.”
“Novig is proving that prediction markets can fundamentally reshape sports betting by removing the exploitative middleman,” says Paul Veradittakit, Managing Partner at Pantera Capital. “Their peer-to-peer exchange delivers what traditional sportsbooks can’t: better odds, fairer market structure, and alignment between platform success and user profitability. When 23% of users are profitable compared to 2% on traditional platforms, it’s clear this is a foundational change to the industry. …
You can also take a look at Underdog, a daily fantasy pick’em operator, for more evidence. It was actually contesting the state-regulated sports betting industry. Then it saw a cheaper and less onerous path to offering sports betting sports event contracts, and gave up on being a state-regulated sportsbook.
People seem to think all of these alternatives to sports betting will go away. But let’s take stock:
For all the victory laps folks have taken about legislative bans and cease-and-desists for sweepstakes casinos and sportsbooks, the industry still exists with a sizable addressable market.
Daily fantasy pick’em isn’t going away. PrizePicks (recently acquired) and Underdog are both massive companies, with a growing cohort of other operators in the space.
I won’t belabor the point on prediction markets; you read about that almost every day. But the idea that sports betting via prediction markets like Kalshi might go away down the road is a maybe, not a certainty.
And, of course, offshore sportsbooks still exist in the background, with little will or action by federal authorities to rein them in.
All of these things will exist in some form for the foreseeable future.
I don’t know what the next way to offer sports betting outside of state regulation will be. But I can almost guarantee someone will figure something else out, eventually.
If you’re an operator, a regulator, a policymaker: You can try to learn from these dynamics and adapt.
Or don’t. It’s up to you. I just write a newsletter.
Gambling news roundup
The Handle: New Jersey Sports Betting Wagers Drop Double Digits Again In January (The Closing Line, paywall): It was a sluggish start to the new year for New Jersey’s sports betting industry. Here are the new numbers for January:
Handle: $1,034,434,347 (-10% YoY)
Revenue: $114,233,099 (-7%)
Hold: 11.0%
Taxes: $23,866,359
Amid a longer-term downward drift, the Philadelphia Eagles’ loss in the Wild Card round of the NFL playoffs certainly didn’t help the situation. It was, in fact, the slowest January for local sportsbooks since 2021.
As always, you can contact me for a free trial to The Handle.
Caesars Entertainment earnings, at a glance (press release): Caesars Entertainment, Inc., today (Tuesday) reported operating results for the fourth quarter and full year ended December 31, 2025.
Fourth Quarter Results:
GAAP net revenues of $2.9 billion versus $2.8 billion for the comparable prior-year period.
GAAP net loss of $250 million compared to net income of $11 million for the comparable prior-year period, with the decrease primarily driven by gains on asset sales in the prior year period of over $350 million.
Same-store Adjusted EBITDA of $901 million versus $882 million for the comparable prior-year period.
Caesars Digital Adjusted EBITDA of $85 million versus $20 million for the comparable prior-year period.
Full Year Results:
GAAP net revenues of $11.5 billion versus $11.2 billion for the comparable prior-year period.
GAAP net loss of $502 million compared to net loss of $278 million for the comparable prior-year period, with the decrease primarily driven by gains on asset sales in the prior year period of over $350 million.
Same-store Adjusted EBITDA of $3.6 billion versus $3.7 billion for the comparable prior-year period.
Caesars Digital Adjusted EBITDA of $236 million versus $117 million for the comparable prior-year period.
Tom Reeg, Chief Executive Officer of Caesars Entertainment, Inc., commented, “Fourth quarter consolidated same-store Adjusted EBITDA grew year over year driven by Caesars Digital which set a new quarterly record of $85 million, stable results in our Regional segment and a quarterly sequential improvement in operating trends in Las Vegas. As we look ahead to 2026, the brick-and-mortar operating environment remains stable, and we are expecting another year of strong Net Revenue and Adjusted EBITDA growth in our Caesars Digital segment. When combined with lower capex and cash interest expense, 2026 is forecasted to deliver strong free cash flow that we expect to use to pay down debt and opportunistically repurchase our common stock.”
Caesars Stock Jumps 15% as CEO Dismisses ‘Vegas Crisis’ (Barron’s, paywall): “Caesars stock soared Wednesday after the casino operator posted solid earnings and moved to ease investors’ concerns that Las Vegas is losing its luster in a world of prediction markets and online gambling.”
Caesars Reports Digital Growth But Throws Spinoff On Back Burner (Legal Sports Report): “It is not the right time to spin Caesars Digital off into its own entity, CEO Tom Reeg said on Tuesday‘s earnings call. Caesars has repeatedly talked about different ways it can better extract value out of the Digital business as its share price has struggled to reflect the value. One likely option includes an IPO to separate the online casino and sports betting business out from under the Caesars umbrella, but that is not happening in the near term.
“I would say given what we’ve seen in valuations in the space over the past six to nine months, this doesn’t seem like a market that screams you should come and offer some equity of any kind,” Reeg said during the company’s year-end earnings call. “So unlikely you see something in the near term.”
Caesars talked prediction markets in Q4 earnings: Here’s Caesars Entertainment CEO Tom Reeg on Tuesday:
“Prediction markets, I know everybody’s got prediction markets questions; we’re no smarter than you in terms of what will happen. To me, this is clearly gambling. I think it will take a couple of years to wind its way through the courts, and you’ll have a patchwork of states where they’re not allowed, states where they’re allowed.
In the current regulatory environment, you shouldn’t expect us to be participating in prediction markets. Some of our most valuable assets are our gaming licenses in each of the states that we operate, and it’s been made clear to us in a number of states that if we pursue that avenue, some of our bricks-and-mortar licenses could be at risk. You shouldn’t expect us to do that.
But notwithstanding, if there becomes clarity that there is a legal path for prediction markets that satisfies regulators on the brick-and-mortar side, we will find a way to participate. But I would tell you, unequivocally, we view this as gambling that should not be regulated. These are not swaps. They’re not miraculously finding the other side of a 5-team parlay at the same time one side comes in, but we’ll let that play out through the courts.
Notwithstanding, our handle grew in the fourth quarter, and continues to grow. We’re not seeing any impact that we can see in our regulated markets as we operate today.”
More Q4 earnings:
Kambi: “I take confidence from how we ended the year, displaying signs that we are now turning the corner towards a period of gradual growth” – says Werner Becher, CEO of Kambi Group
Financial highlights:
Revenue in the fourth quarter 2025 was €42.7m (44.5m), a decrease of 3.9%. Excluding €1.3m of transition fees received in Q4 2024, revenues decreased by 1.1%. For the period January to December 2025, revenues were €162.0m (176.4m), a decrease of 8.2%. Excluding €12.5m of transition fees received in the same period in 2024, revenues decreased by 1.2%.
Adjusted EBITA (acq) in the quarter was €6.2m (7.1m) at a margin of 14.4% (16.0%), and €7.4m (6.3m) excluding the impact of FX revaluations. For the period January to December 2025, Adjusted EBITA (acq) was €15.5m (25.3m) at a margin of 9.6% (14.3%), and €17.6m (25.4m) excluding the impact of FX revaluations.
Kambi stock was down slightly Wednesday.
Rush Street: Rush Street Interactive, Inc., a leading online casino and sports betting company in the United States and the rest of the Americas, today (Tuesday) announced financial results for the fourth quarter and full year ended December 31, 2025.
Fourth Quarter 2025 Highlights
Revenue was $324.9 million during the fourth quarter of 2025, a new quarterly record and an increase of 28%, compared to $254.2 million during the fourth quarter of 2024.
Net income was $19.1 million during the fourth quarter of 2025, compared to $6.5 million during the fourth quarter of 2024.
Adjusted EBITDA was $44.1 million during the fourth quarter of 2025, a new quarterly record and an increase of 44% compared to $30.6 million during the fourth quarter of 2024.
Adjusted sales and marketing expense1 was $45.4 million during the fourth quarter of 2025, representing 14% of Revenue.
Total Monthly Active Users (“MAU”) in the United States and Canada were over 278,000, up 37% year-over-year, and up 51% year-over-year in online casino. MAUs in Latin America (which includes Mexico) were over 493,000, up 47% year-over-year.
Average Revenue per Monthly Active User (“ARPMAU”) in the United States and Canada was $331 during the fourth quarter of 2025 while ARPMAU in Latin America was $32.
Stock price was up from Tuesday’s close on the report.
RSI could bring minimum bet limit in IL to other states (SBC Americas): “Rush Street Interactive (RSI) is considering making nationwide changes to its house rules as lawmakers across the country consider tax rate changes for online sports betting. The owner of BetRivers released its latest earnings report, supplemented by an earnings call that included additional context regarding the company’s bottom line and its operational plans for the future. During the earnings call, RSI shared that the company may explore implementing a bet limit in other U.S. markets that mirrors its BetRivers limit in Illinois.”
It has been a busy week in prediction markets: Catch up with everything in my roundup at The Event Horizon.
DraftKings Will Spend $400 Million On Prediction Market In 2026, Analyst Estimates (InGame): “DraftKings will spend $400 million on prediction markets in 2026, a Wall Street analyst estimates, quantifying CEO Jason Robins’ pledge to ‘deploy growth capital’ to attempt to become a winner in the vertical. Joe Stauff, an analyst with Susquehanna International Group, wrote in a Tuesday note to clients that his team estimates prediction market losses will drag down DraftKings’ 2026 adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) by $300 million. With the business spending another estimated $100 million on customer acquisition costs that are not included in the EBITDA figure, that means DraftKings will spend $400 million in total during the year, he wrote.”
NASCAR Considers ‘Data Integrity Partnership’ With Prediction Markets Kalshi, Polymarket, Robinhood (Bookies): “We’ve decided for now to not pursue anything in the prediction market space, but what we are talking about with groups like Robinhood and Kalshi and Polymarket, is ‘Is there a way that we can do some sort of data integrity partnership that doesn’t encroach on this state issue?’ That’s where I have to have more conversations with Arizona and North Carolina. Around the fact that we’re not doing a marketing sponsorship. This is more to protect the brand and fold in regulations and integrity and responsible gaming where those things don’t exist,” NASCAR Director of Sports Betting Joseph Solosky told Bookies.com ahead of the Daytona 500 this past weekend.
Genius Sports Issues Letter From CEO (press release): Genius Sports Limited today issued a letter to shareholders from Mark Locke, CEO and Co-Founder.
Dear Shareholders,
Why We Acquired Legend
The market’s reaction to our acquisition of Legend has been divided. That has happened before when we made transformative deals.
When we entered official data rights agreements, the economics were questioned. When we signed our long-term partnership with the NFL, many doubted the scale and sustainability of the opportunity. When we acquired Second Spectrum, there were similar concerns about commercial application. In each case, our thesis was rooted in structural change rather than short-term convention. Over time, execution clarified what the strategy already anticipated.
This acquisition follows the same pattern. Some people think we bought a simple affiliate business. Our view is different. We bought a participation layer built on two decades of technological investment that sits between official data infrastructure and the moment of transaction. …
💡My take: The letter is quite lengthy, if you want a lot more detail about why Genius did the acquisition. In the initial announcement, Genius stayed away from calling Legend an affiliate, and Locke doubled down on Genius acquiring something he views as much more than an affiliate in the letter while acknowledging that dynamic.
The stock price rebounded a little less than 10% by Wednesday afternoon, but it’s still down more than 30% for the month. In hindsight, Genius probably would have blunted some but not all of the investor sentiment had it sold the M&A better the first time around.
Legislative roundup: Hawaii sports betting bill advances, Wisconsin discussions continue (iGB): “Lawmakers in Hawaii took a familiar step forward toward legalising online sports betting. Whether another step will follow is the main question. The Hawaii House Economic Development and Technology Committee advanced HB 2570 last week by a 5-3 vote. The approval came despite heavy testimony in opposition to the proposal to legalise online sports betting in the state.”
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.
NBA stars cash in on betting, predictions boom amid player concerns (The Athletic): “As professional sports leagues continue sifting through the implications of the legalized sports betting ecosystem their commissioners pushed for, they are not the only ones profiting from it. In the NBA, at least, some of its biggest stars are also cashing in. It has made for a bizarre landscape. The league is dealing with the fallout of a federal indictment that alleged an illegal sports gambling scheme involving two players. At the same time, sports gambling ads continue to pepper game broadcasts, and sportsbooks are among the major advertisers for the league and many of its teams.”
DraftKings Director Takes Advantage Of Dip, Buys 100,000 Shares (Legal Sports Report): “At least one insider at DraftKings expects a turnaround from the stock’s recent hammering. Director Harry Sloan paid nearly $2.2 million to buy 100,000 DraftKings shares on the open market Tuesday, at an average price of $21.85 each. He bought the stock in multiple transactions at prices between $21.76 and $22.00. DKNG saw its stock fall nearly 14% on Friday on more than five times its average volume. The drop started Thursday after its 2025 earnings were released and continued through Friday despite positive commentary from the company on its earnings call.”
U.S. In-Game Sports Betting Becoming More Popular As Technology, Markets Improve (Sports Betting Dime): “While in-game U.S. sports betting handle has increased over the last few years, it has yet to see the handle totals that rival European markets. However, Patrick Mostboeck, Senior Vice President of Fan Engagement for Sportradar, reported to Sports Betting Dime that the U.S. in-game markets are closing the gap with Europe, aided by advancing technology and improved in-game offerings from technology providers such as Sportradar. Mostboeck discussed Sportradar’s role in making in-game sports betting more appealing to U.S. audiences and how in-game markets provide a significant growth opportunity for U.S. sports betting companies."
Caesars Entertainment Launches First Proprietary Online Slot, Ca$hline™ (press release): Caesars Entertainment, Inc. today announced the debut of Ca$hline, a new three-reel stepper slot created by Empire Creative™, the Company’s in-house game development studio. Now live exclusively across Caesars Palace Online Casino, Caesars Sportsbook & Casino, and Horseshoe Online Casino in New Jersey, Ca$hline marks a significant milestone as Empire Creative’s first original slot title and continues Caesars’ momentum in proprietary content development.
Designed for players who want greater control and engagement from every spin, Ca$hline introduces a fresh take on the classic stepper slot experience. Built on Empire Creative’s new “Land It, Win It” format, the 3-reel title allows players to wager on Reel 1, Reels 1 & 2 or all three reels, unlocking additional features and expanded win potential as all three reels are activated. This flexible structure lets players tailor pacing and overall gameplay style to match their preferences in real time.
“Ca$hline is built to give players simple, meaningful choices every time they play,” said Matthew Sunderland, Senior Vice President and Chief iGaming Officer at Caesars Digital. “The team has created a streamlined, player‑driven experience anchored by choice, control and fresh mechanics that respect the classic stepper format.”
Slowly — And With Much Industry Silence — New Slot Tax Threshold Goes Into Effect (Casino Reports): “Tucked away in an obscure provision of the latest federal budget was a long-desired line item. The Internal Revenue Service, in a concession to inflation, adjusted the so-called ‘IRS lockdown’ threshold. Hitherto, when a slot machine hit a jackpot of $1,200 or greater, it froze up so that IRS paperwork could be filled out prior to payment. Now, that threshold has been reset to $2,000 per jackpot, indexed annually to inflation.”
“Initially, if you looked at the Big Beautiful Bill provision, that’s 70433, it says that they’re amending a provision of the tax law, to change reporting requirements. It wasn’t clear whether that applied to slot machines or not,” Rep. Dina Titus, a Democrat representing Nevada, explained to Casino Reports. “It took a while for the industry to decide that it did,” further delaying implementation.
International Association of Gaming Regulators names Kevin Mullally first CEO (SBC Americas): “The International Association of Gaming Regulators (IAGR) has named its first-ever CEO, a move it said reflects its continued growth and expanding global engagement in an increasingly complex regulatory environment. The IAGR has entrusted Kevin Mullally with the role, the senior gaming executive and attorney who most recently served as CEO of the United Arab Emirates General Commercial Gaming Regulatory Authority (GCGRA), overseeing the development of the nation’s expansion into regulated gambling, including the creation and implementation of a national regulatory framework for emerging gaming and the launch of the UAE Lottery.”
The latest from Gaming News Canada:
Offshore Betting Operator Bodog Rebrands as Ozoon in Canada (Covers): “The Bodog brand is no more after the company’s owner officially rebranded the sports betting, online casino, and poker site to Ozoon on Tuesday. Ozoon launched in Canada after an overnight maintenance transition. Player accounts from Bodog were successfully transferred, and users can gain access with their previous login and password. The company announced Monday that the Bodog name wasn’t renewed with gaming operators, ending a nearly 30-year run for the brand that gained mass popularity during the early 2000s online betting craze.”
