The Takeaway: Four Things You Should Be Freaking Out About In Gambling Right Now
Gambling news roundup: Flutter takes 100% ownership of FanDuel; CNBC's Jim Cramer is bullish on sports betting; federal gambling tax fix faces opposition in Senate.
Every Thursday in The Takeaway, The Closing Line provides commentary on trends and news in the gambling industry.
Disruption is constant across most industries — and gambling is no exception. But what should the gambling industry be worried about now?
Re-regulation
I’ve written in this newsletter in the past that it seemed like the industry writ large had reached a state of equilibrium. But that’s not the case anymore:
For regulated sports betting and online casinos, it’s been popular for states to revisit taxes and also tinker with existing laws and regulations. The latter has been pretty de minimis, so far, but the proposed tax changes have not been. The per-wager tax in Illinois that became law and a doubling of the Ohio sports betting tax rate that didn’t get to the finish line come to mind. It seems like the industry needs to be prepared for more of this moving forward.
Sweepstakes sportsbooks and casinos had enjoyed a golden age for several years (and more than a decade for VGW) — likely bred mostly from ignorance of the industry existing. Now we have both regulatory and legislative pushes trying to rein in or ban more than a hundred operators in the space.
Daily fantasy sports had seemed to be settled law. But the California attorney general opinion that DFS is illegal has opened up the can of worms again. So far, this has mostly created uncertainty. Operators seem to be serving the state still, biding their time and/or awaiting enforcement action (that may or may not come) before they act. That status quo could persist, but there’s also the possibility that California’s action means other states take a fresh look at DFS.
No matter what part of the gambling ecosystem you sit in, the threat of re-regulation looms.
Falling behind online
We will have increasingly more online gambling in the US as time goes on. The question is if it will be legal and regulated by states, or if the only options will be offshore/unregulated/quasi-regulated.
But we’re still having the conversation about cannibalization:
I understand that the addition of legal online casinos is worrisome for land-based casinos. But look at all the ways we can gamble online now, running the spectrum from white to black:
DFS/fantasy pick’em
Sweepstakes
Online lotteries that function much like online casinos plus draw and scratch game sales online via couriers
Online horse betting
Offshore online casinos
Crypto casinos
Prediction markets
I am sure that’s not an all-inclusive list. All of this is going on, sometimes at scale, in much of the country. People are going to find and use these online gambling options, whether you legalize more online gambling or not.
And say what you will about the legal status of some of the above, but they are innovating in ways the legal and regulated market is not.
The legal US gambling industry should be wary of ceding the online gambling market to everyone above into perpetuity.
Responsible gambling (but not what you think)
Yes, we should be worried about responsible and problem gambling in the regulated online gambling industry. I am not trying to downplay that.
What worries me most is the potential ticking time bomb of prediction markets becoming full-on sportsbooks, in all 50 states for everyone 18 and over. News flash: if you think RG and PG concerns are bad in the current US sports betting market, you haven’t seen anything yet.
For example, here’s a lawyer for Kalshi speaking in front of a group of policymakers at the National Council of Legislators from Gaming States event today. (Thanks again to SBC’s Jessica Welman for the tweets):
If you’re keeping track: It’s not Kalshi’s problem if people lose money, and it’s not sports betting.
Kalshi (and the Commodity Futures Trading Commission) have no desire to treat the product like gambling. If you think they will eventually, you’re living in a fantasy land. Kalshi did roll out some RG features earlier this year, but they are buried in the UX.
There is already limited integration of Kalshi’s sports betting markets with Robinhood, and many more brokers are reportedly on the way. We don’t know how many of them might include sports betting. It’s only a matter of time before we get a fuller sports betting product at Robinhood, like betting on the outcomes of NFL and college games this fall.
If we are about to see an explosion of federally regulated sports betting, that’s going to come with a host of RG/PG problems that may make the current landscape pale by comparison.
The federal gambling tax change
I hesitate to put this in the “freak out” category, because I think some people are overselling this as “the end of gambling in the US.” That’s an exaggeration.
However, the change that was in the Big Beautiful Bill where people can only deduct 90% of gambling losses is terrible policy and could have knock-on effects. The change clearly hurts both pros and whales/high-value players. Maybe no one loses sleep over the pro gamblers (although that is short-sighted), but clearly everyone should care about whales and where they gamble. The tax change could encourage them to go offshore.
And while it may not have a huge impact on a lot of casual gamblers, I am guessing we’d rather not find out if it has a chilling effect on legal gambling. Getting this fix done should be a priority.
If nothing else, the gambling industry doesn’t want to go down the slippery slope of allowing more federal policies that are bad for the industry.
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.
Gambling news roundup
Flutter secures 100% ownership of FanDuel through new agreement with Boyd (press release): “Flutter Entertainment the world’s leading online sports betting and iGaming operator today announces the extension of its long-term strategic partnership with Boyd Gaming Corporation to 2038 and the buyout of Boyd’s 5% stake in FanDuel Group, together ‘the Agreement.’”
Under the terms of the Agreement, Flutter will pay Boyd approximately $1.755bn to acquire Boyd’s 5% stake in FanDuel and to revise various existing commercial terms, taking Flutter’s holding in the #1 sports betting and iGaming business in the US to 100% at an attractive implied valuation of approximately $31bn. The Agreement also provides for the extension of the strategic partnership between FanDuel and Boyd at significantly reduced market access costs in the states where FanDuel’s market access is provided by Boyd. This is expected to contribute to annual savings for Flutter of approximately $65m beginning July 1, 2025.
The Agreement delivers on key strategic objectives at attractive economics:
Increased ownership of the market #1: This transaction secures 100%3 ownership of FanDuel, the premier asset in the US sports betting and iGaming market. FanDuel is the clear number one in the market with a 43% market share in sports betting and 27% in iGaming5, driven by key sustainable competitive advantages, including access to the ‘Flutter Edge’. …
Peter Jackson, CEO, commented: “Our acquisition of FanDuel in 2018 is one of the most transformational events in our Group’s history, with its natural competitive advantages combined with access to Flutter Edge capabilities driving impressive growth to become the well-established and clear leader in US online sports betting and iGaming. I am really pleased to drive future value for our shareholders by increasing our ownership of FanDuel to 100%. Boyd have been fantastic partners for FanDuel, and we are delighted to be extending our important strategic partnership through to 2038.”
Jim Cramer is bullish on sports betting despite new tax measure in Trump’s megabill. Here’s why (CNBC): “CNBC’s Jim Cramer on Wednesday unpacked a tax measure in President Donald Trump’s megabill that could impact the sports betting industry. He said he’s not too worried it will hurt business for big players DraftKings and FanDuel parent Flutter.”
“Ultimately, I think this is something we need to watch, but it doesn’t change my bullish attitude toward DraftKings and Flutter,” he said. “The thesis here is very simple: these two companies have emerged as an effective duopoly in online sports betting.”
DraftKings and FanDuel seeing Cramer trying to curse their businesses:
And here’s a segment from goings-on in the industry from CNBC’s Contessa Brewer:
Senate GOP blocks push to restore gambling losses deduction (The Hill): “Senate Republicans on Thursday blocked an effort by Sen. Catherine Cortez Masto (D-Nev.) to restore the 100 percent tax deduction for gambling losses after it was cut down to 90 percent in President Trump’s massive tax and spending package that became law last week. Cortez Masto attempted to restore the full deduction via unanimous consent on the floor, arguing that the provision, which many Senate Republicans were unaware of until the entire bill became law, would harm her state immensely. Las Vegas is known as the “gambling capital of the world.”
More liquidity for legal online poker? (Twitter, Jeff Ifrah of Ifrah Law): “Ontario has asked an appeals court for permission to open up online poker tables in Ontario to US and other foreign poker players where those players hail from legal jurisdictions. Source: Doug Downey, Attorney General, Ontario at @NCLGS today.”
NCLGS Commencement Panel Spans Online Growth, Tax Rates, Tribes, Cybersecurity (Casino Reports): “The topics covered by the five speakers on the commencement panel of the National Council of Legislators from Gaming States (NCLGS) Summer Meeting on Thursday morning in Louisville, Kentucky ran the gaming gamut from historical perspectives, to current tax rate talk, to cybersecurity. While not a whipsaw pace as each speaker presented for roughly 10 to 15 minutes, each participant provided key status points for multiple gambling verticals and the industry overall to the roughly 180 legislators and regulators registered to attend. The overall picture was one of optimism, with gaming revenue growth expected to continue. The challenge to expand online casino gaming beyond the current seven regulated states again took center stage as offshore markets and cannibalization concerns remained at the forefront.”
Chumba Casino, VGW Sites Start Charging Sales Tax: ‘Appropriate Time To Take This Action’ (Sweepsy): “The leader of the online sweepstakes casino industry is trying to prove to states it’s willing to comply with any and all regulations — and, maybe more importantly, willing to provide tax revenue to the states. On Wednesday, VGW, the Australian operator that owns Chumba Casino, LuckyLand Slots, and Global Poker, began charging sales tax on Gold Coin purchases on all three of its sites ‘across several US states,’ a VGW spokesperson told Sweepsy.”
“We acknowledge this is a change for some of our players, but as the legal framework has evolved over time, we’ve determined it is the appropriate time to take this action,” the spokesperson told Sweepsy. “This is part of our commitment to upholding the highest standards of integrity and compliance, and our focus now is on ensuring players are well informed and supported as required.”
California Tribal Gaming Leaders, Attorneys Confident They’ll Win Battle Against Sweepstakes Casinos (Covers): “A group of tribal gaming leaders and attorneys are confident sweepstakes gaming operators will lose in California. With a bill to explicitly ban sweepstakes casinos moving through the Golden State’s Senate with success, Victor Rocha, conference chair of the Indian Gaming Association, said during his webcast ‘New Normal’ it’s only a matter of time before the controversial dual currency form of gaming is eradicated.”
“California is the place this all ends,” Rocha said during Wednesday’s episode. “They just don’t have an argument.”
Venture Capital Firms Bet Big on Gambling. Now They’re Banking on the Addictions (Barron’s, paywall): “Alumni Ventures got in early on the sports betting trend. In 2017, the New Hampshire–based venture-capital firm was part of an initial round of investment that raised $2 million for Sleeper, a fantasy sports and betting app. Four years later, Sleeper was valued at $400 million. This past August, Alumni made a new bet—this time on gambling addiction treatment, investing $1.5 million in Kindbridge Behavioral Health. Alumni isn’t the only one getting in on the pair trade. Bettor Capital, a VC firm devoted entirely to gambling, invested in Kindbridge in March. In all, Barron’s identified six VC firms simultaneously invested in gambling and gambling treatment. Most didn’t respond to requests for comment.”
This is a somewhat critical but also balanced and nuanced story that’s worth reading.
Kalshi Changed The Title Of A Market About X's CEO, And It Seems Like A Problem (The Event Horizon): “Kalshi had what seems like a pretty clear-cut market posted about whether the CEO of X (aka Twitter), Linda Yaccarino, would leave her role this yearIt turns out it’s not as clear-cut as it might seem for people trading at the prediction market. At some point on Wednesday night, Kalshi decided to change the name of the market and started getting at least a small amount of blowback.
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DraftKings to pay back $3M to Connecticut players in promo settlement (SBC Americas): “DraftKings is returning $3 million to customers in Connecticut following an investigation by the state’s Department of Consumer Protection (DCP) into the operator’s bonus offers. The DCP reached a settlement with DraftKings requiring the Boston-based sports betting and fantasy giant to return funds to approximately 7,000 consumers in Connecticut.”
Caesars Sportsbook Enhances Mobile Wagering Experience in Nevada with the Launch of Universal Digital Wallet (press release): “Caesars Entertainment, Inc. today announced a major upgrade to its mobile sports betting platform with the launch of a universal digital wallet on the Caesars Sportsbook app in Nevada. This enhancement streamlines the wagering experience for sports bettors who visit Nevada, enabling them to manage funds and Caesars Rewards® credits in one place, with seamless access across 19 jurisdictions where Caesars Sportsbook offers mobile sports wagering. With this update, users in Nevada can experience added convenience, with all funds and rewards immediately visible and available after logging in. Caesars plans to add universal wallet functionality to more North American jurisdictions where it offers mobile sports wagering in the future.
“We’re always looking for ways to make things easier and more seamless for our players,” said Eric Hession, President of Caesars Digital. “The launch of our universal wallet in Nevada is a significant step forward and a long-anticipated enhancement that brings greater convenience and connectivity to our mobile app. With this update, sports bettors who visit Nevada and our world-class destinations on the Las Vegas Strip or beyond can enjoy a consistent experience wherever they go, with their account, funds, and rewards all in one place, just as it should be.”
“Customers 21 and older who sign up and are verified for a Caesars Sportsbook mobile account in Nevada can use the app when they return home or travel to any jurisdiction where the Caesars Sportsbook mobile app is live and sign in with their universal set of login credentials. Similarly, customers who already have an existing Caesars Sportsbook mobile account from another state can use their universal wallet in Nevada, once it’s validated at any in-person Caesars Sportsbook location in Las Vegas, Reno, Lake Tahoe, and many more.”
Atlantic Digital and BetMGM Debut Friends™: “The One With the Multi Drop”™ (press release): “Atlantic Digital, the London-based studio known for premium entertainment-branded games, has announced the exclusive United States release of Friends: ‘The One With the Multi Drop’™, in partnership with BetMGM a leading iGaming and sports betting operator. Friends: ‘The One With the Multi Drop’™, is currently available in Michigan and New Jersey, with additional markets to follow. This marks the first official online casino game based on the iconic television series and Atlantic Digital will develop additional Friends slot titles that will be available at BetMGM in the upcoming months.”
“Friends is one of the most iconic and beloved television shows of all time,” said Sam Hobcraft, CEO of Atlantic Digital. “Bringing it to life in an interactive casino format has been both a privilege and a creative challenge. Our mission is to merge world-class entertainment IP with innovative gameplay, and Friends: ‘The One With the Multi Drop’™, is a perfect example of that. We’re thrilled to partner with BetMGM to deliver this exclusive experience to players in the U.S.”
