The Takeaway: Republicans' Gambling Policies Make No Sense
Gambling news roundup: NCAA announces investigations into 13 former basketball players; NBA team cancels 'sports betting night'; California sweepstakes casino ban one step closer to reality.
Every Thursday in The Takeaway, The Closing Line provides commentary on trends and news in the gambling industry.
On one side, Republicans are backing a change to how gamblers can deduct taxes because they think it punishes people who gamble and the gambling industry.
On the other side, Republicans are apparently libertarians who think gambling is great as long as it happens in prediction markets and you don’t call it gambling.
Someone make it make sense. Let’s dig into these misaligned policies of the Republican Party.
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First, we have the fallout from the One Big Beautiful Bill, which I am sure most readers of this newsletter are familiar with. A provision in that law makes it so that people can only deduct 90% of their gambling losses, resulting in paying taxes on phantom money. Rep. Dina Titus (D-Nevada) is seeking to roll that back with her FAIR BET Act.
While it seems like there is some bipartisan desire to change it back to a 100% loss deduction, Republicans stopped the first attempt to get it to the finish line in a proposed amendment to add it to a larger bill.
Beyond that, there’s actually a movement to KEEP the gambling loss deduction change in place from conservative circles.
This recent piece in The Washington Examiner from Concerned Women for America is actively advocating for no change:
Gambling was once relegated to windowless palaces filled with flashing lights, slot machine pings, and the clatter of chips on poker tables. Today, it is as ubiquitous as social media.
The normalization of gambling has not, however, changed its deleterious effects on families. That is why Congress should celebrate, not reverse course, on its win in the One Big Beautiful Bill Act, which will help curb the growing influence of sports betting. …
This minor change is a small step toward reducing the ease and attractiveness of endlessly placing bets on sporting events.
That comes after a group led by former Vice President Mike Pence also advocated for the deduction change to stay. The Advancing American Freedom Foundation put out this:
The Tax Code Should Encourage Pro-Growth Economic Activity:
Until the One Big Beautiful Bill, America's tax code actively encouraged gambling by offering full expensing for gambling losses.
Gambling losses should not be deductible at all.
BOTTOMLINE: Americans have the freedom to gamble on sports, but why should American taxpayers foot the tax bill for sports gambling? Nearly all gamblers lose money, leading to further financial, health, and family problems. Congress should encourage a pro-growth tax code by declining to reinstate full expensing for gambling losses. Legalized sports gambling ultimately makes life more difficult for many Americans while funding the growth of government.
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To be fair, these viewpoints don’t represent all Republicans, some of whom have expressed interest in putting things back the way they were. But in an environment where changing the deduction will be difficult at best, it’s making things even harder. But from the conservative point of view, it’s at least a defensible position and dovetails with moral arguments against gambling. It’s not necessarily dissonant.
Support for sports betting via Kalshi and other prediction markets, however, is extremely dissonant.
The Commodity Futures Trading Commission under the Trump administration is turning a blind eye to gambling on its watch, under the idea that government agencies have too much power. Again, at least a defensible and often consistent theme for today’s Republican Party.
But we also get some cohort Republicans actually saying that if you stop sports betting at prediction markets, that’s a terrible thing! Here are a couple of former senators — one Democrat and one Republican — in a piece this week.
The business of competition in sports is exploding beyond athletes, with most Americans now enjoying a range of options from gambling sites like DraftKings to prediction markets like Kalshi. As the industry booms, state gambling regulators are trying to assert authority over all of it, including prediction markets, in a direct threat to the global financial markets.
The matter is now being contested in courts across the U.S. But the law is clear, thanks to reforms we helped shape after the 2008 financial crisis: Prediction markets should have to answer to their federal regulator, the Commodity Futures Trading Commission, and nobody else.
Our strong belief in this principle is why we signed on to an amicus brief supporting Kalshi in its legal fight against the New Jersey Division of Gaming Enforcement. The case, now before the 3rd Circuit Court of Appeals, has profound implications: If Kalshi loses, states could have carte blanche to prohibit any futures or other derivatives contract they object to, potentially throwing the $730 trillion global derivatives market into chaos. …
Such an outcome would also undermine the post-crisis changes we worked on in Congress. If the states are successful in unwinding that authority, they will invite a global disaster that dwarfs the wreckage of the last crisis.
Hyperbole aside on the collapse of our economic system, some Republicans are basically saying this form of gambling is just fine. Former Sen. Blanche Lincoln — now a lobbyist who has worked with Kalshi — has also come out on the side that states trying to stop sports betting via prediction markets is dangerous:
I have great concern this system is under threat by some recent states’ efforts to block prediction markets – federally regulated futures contracts that traders use to predict the outcomes of closely watched events.
If these states succeed, imagine the potential fallout. It could establish a damaging precedent where states feel empowered to block all sorts of contracts, including contracts that have long established and unquestioned economic utility. Before long, investors, traders and businesses might conclude that CFTC authority is now completely undermined with huge destabilizing impacts on the $60 trillion derivatives market that the agency regulates. It is hard to overstate the importance of these markets to our economy because businesses rely on them to protect themselves from big swings in interest rates, commodity prices and currencies.
This is why it is crucial that the CFTC make clear that all prediction markets fall entirely under its domain with no interference by states. If a formal rule is necessary to achieve this goal, then the agency should not hesitate to act.
Republicans during the confirmation hearing for CFTC nominee Brian Quintenz either had no idea or didn’t care that the agency already was and will continue to be a de facto regulator of sports betting. And that’s of course on top of Acting Chairman Caroline Pham’s inaction; she has done nothing to curttail sports betting happening on her watch.
So is gambling a problem for today’s Republican Party? Or are they libertarians who want gambling to happen and no one should get in its way?
It would be neat if they picked a side.
Gambling news roundup
NCAA pursues additional sports betting violations | Cases involve 13 former men’s basketball student-athletes (NCAA press release): “The NCAA enforcement staff is in the process of alleging violations of sports betting rules and/or related failure-to-cooperate violations for 13 former men's basketball student-athletes who competed at six schools at the time the conduct in question occurred. While the facts and alleged behaviors in each case vary, they include student-athletes betting on and against their own teams, sharing information with third parties for purposes of sports betting, knowingly manipulating scoring or game outcomes and/or refusing to participate in the enforcement staff's investigation.”
“The NCAA Committee on Infractions already has resolved three similar cases, concluding that three men's basketball student-athletes violated sports betting rules and manipulated game outcomes. While a number of schools have been identified in media reporting, current ongoing cases include student-athletes formerly associated with Eastern Michigan, Temple, Arizona State, New Orleans, North Carolina A&T and Mississippi Valley. Additional cases are in various stages of the investigation process.”
“As with the previously resolved cases, the schools and respective school staffs in the ongoing cases are not alleged to have been involved in the violations by student-athletes, and the enforcement staff is not seeking penalties for the schools themselves for the student-athletes' conduct.
The NCAA is releasing this information at this point in the process because of the extensive public reporting regarding these cases. The NCAA will not publicly name the involved student-athletes until the infractions process has concluded. None of them are enrolled at their previous NCAA schools.”
"The NCAA monitors over 22,000 contests every year and will continue to aggressively pursue competition integrity risks such as these," NCAA President Charlie Baker said. "I am grateful for the NCAA enforcement team's relentless work and for the schools' cooperation in these matters. The rise of sports betting is creating more opportunity for athletes across sports to engage in this unacceptable behavior, and while legalized sports betting is here to stay, regulators and gaming companies can do more to reduce these integrity risks by eliminating prop bets and giving sports leagues a seat at the table when setting policies."
“Through the NCAA's extensive integrity monitoring program and network of sources, the enforcement staff became aware of unusual betting activities around regular-season games played by these teams. The enforcement staff followed up on those reports and substantiated — in some cases, via text messages, direct messages on social media platforms and other material evidence — that violations had occurred.”
The report is short on details, but media reports had been lingering for some time. In the absence of quick resolutions of cases around sports betting, transparency is clearly in the best interest of everyone in the sports and betting ecosystems.
Hornets cancel sports betting theme night with Heat guard Terry Rozier under federal investigation for gambling (Yahoo): The Charlotte Hornets have canceled a sports betting theme night with former guard Terry Rozier linked to a federal gambling investigation. The team was slated to host the promotion March 17, the day Rozier and the Miami Heat were in town. But the team canceled the promotion Wednesday, per the South Florida Sun Sentinel. …When asked why the Hornets removed the promotion Wednesday, the team did not mention the gambling probe, simply telling the Sun Sentinel the promotion was "no longer happening on that day." It's unclear whether the Hornets plan to reschedule the event.
Having a “sports betting night” isn’t even a good idea in a vacuum, much less with the backdrop of the Rozier investigation. How did this not get stopped at any point in the process before it went live?
New Study Challenges Common Negative Sports Betting Narrative (InGame): “Mandel’s analysis of state-level financial data from 2019 to 2024 found results that contradict recent academic warnings about sports betting’s financial dangers. Early adopter states — those that legalized mobile sports betting in 2021 or earlier — saw a 40% drop in consumer bankruptcies between 2019 and 2024, compared to a 34% drop nationally. Looking at all states that legalized mobile betting through 2024, the average decline was still stronger, at 36%. Credit scores followed the same pattern. Early adopter states saw their average FICO scores rise 1.8% over that stretch, exactly in line with the national average. States with mobile sports betting overall saw a 1.7% increase, just a tick below the national number.
“I didn’t know what I’d find,” Mandel said. “The nice thing is this dataset covers all the states, so we could differentiate early adopters, late adopters, and states that did not adopt sports gambling at all.”
California Anti-Sweeps Bill Heading Back To Full Assembly (Casino Reports): “California bill AB 831‘s winding bicameral journey continued Thursday when the Assembly’s Governmental Organization Committee voted unanimously in favor of concurrence for Assemblyperson Antonio Valencia’s legislation that would ban online sweepstakes casinos in the Golden State. The bill now heads back to the full Assembly floor and faces a Friday legislative calendar deadline for passage to be sent to Gov. Gavin Newsom’s desk. The governor has not tipped his hand regarding support or opposition for the measure.”
From opposition to the bill: “The Social Gaming Leadership Alliance (SGLA) expresses its disappointment at the California Assembly Governmental Organization (GO) Committee’s passing of Assembly Bill 831 (AB 831), legislation that would ban online social games with sweepstakes promotions in California. The SGLA warned that moving forward with AB 831 would eliminate more than $1 billion in direct and indirect economic activity in the state each year and deprive California of hundreds of millions of dollars in potential new revenue annually.”
“Today’s hearing exposed the committee's complete disregard for facts, economic reality, and the voices of tens of thousands of Californians all to hand monopoly power to tribes that have already invested hundreds of millions of dollars in Las Vegas and California coastal properties,” said Jeff Duncan, Executive Director of SGLA and former Congressman. “All the while passage of this bill would deny our tribal partners the very opportunities the proponents themselves have used. If this damaging bill moves through the Assembly, we hope Gov. Newsom will see it for the poor policy it is and veto AB 831.”
Other legislation to ban sweepstakes casinos has met an untimely fate late in the game in other states. Proponents of the bill seem convinced this is a done deal…I guess we’ll find out tomorrow.
Playtech labels sweepstakes operations ‘immaterial’ after California exit (SBC Americas): “Playtech leaders sought to minimize their sweepstakes-related operations at their H1 2025 earnings call on Thursday, calling the vertical “immaterial” in the context of the company’s wider U.S. business.
CEO Mor Weizer and CFO Chris McGinnis spoke to investors on Sept. 11, days after the company confirmed to SBC Americas that it had stopped supplying content to sweepstakes casino platforms in California amid a legislative push to ban the vertical in the Golden State and a high-profile lawsuit involving other major suppliers. Asked about their position on sweepstakes gaming, the executives stressed that supplying to sweepstakes makes up only a fraction of the company’s U.S. business.”
“Overall, we see it as immaterial, circa 1% of overall group revenues or single-digit millions kind of amount on a revenue basis,” McGinnis said.
Indian Gaming Conference Becomes Rallying Cry To Stamp Out Sweeps, Rail Against Prediction Markets (Casino Reports): “Wednesday’s three-part discussion addressed how black and gray markets are draining tribal resources and ways that Indian Country can fight back. Rocha, the conference chair, moderated panels with deeply experienced tribal lawyers, a representative from the American Gaming Association (AGA), IGA Chairman Ernie Stevens, and IGA Executive Director Jason Giles. He told the audience he meant to scare them, and attorney Scott Crowell echoed Rocha’s stance. Among the goals, Rocha said, was to get Minnesota tribes riled up and ready to fight as the state legislature there again tries to legalize sports betting in 2026. After California, which has more than 100 tribes, Oklahoma and Minnesota are the biggest tribal gaming states without some form of sports betting. Tribal casinos dot all three states.”
A decent amount of news from prediction markets land including Polymarket’s Civil War market and reporting on Kalshi from mainstream outlets:
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Legal Sports Betting A Done Deal In Minnesota? Yes, But … No (InGame): “The road to legalized sports betting in Minnesota has been … confounding. It may continue to be. Tuesday at the Indian Gaming Association (IGA) Mid-Year Conference, two lawmakers and a representative from the Minnesota Indian Gaming Association (MIGA) shed some light on the challenges, and appear aligned and enthusiastic about the chances in 2026.”
“It’s been frustrating,” MIGA Executive Director Andy Platto told a room full of tribal leaders. “And the Minnesota Model is the one that will work.”
Betr Monitors Prediction Market Scene, But Will Focus On Picks, Arcade App (InGame): “Betr is not yet ready to dance either, Joey Levy, the CEO of the sportsbook/DFS/social casino site told InGame. But the leadership of the company co-founded by him and Paul in 2022 is ruminating, he said.”
“We’re incredibly ambitious and we want to accomplish more,” Levy said. “Prediction markets may, could, definitely be a part of that. We’re evaluating our options, but also just remaining very focused on our existing products and some of the other products that we’ve committed to launching.”
“We’re the only major DFS-plus operator — with the exception of FanDuel, who recently entered the space to have skill games, and FanDuel has their product available in a separate app called FanDuel Face-Off — with everything in the same app, with the same wallet,” Levy said. “So we think [Betr is] just a far more seamless cross-sell experience.
Fanatics Fined $55K in NJ for Sportsbook Violations, Also Outstanding PointsBet Violations (Sports Betting Dime): “Fanatics Sportsbook is literally paying for the sins of a previously licensed sportsbook operator in New Jersey.
The New Jersey Division of Gaming Enforcement (DGE) levied a $55,000 fine against FBG Enterprises Opco (Fanatics) for failures to comply with the New Jersey Sports Wagering Act and state sports betting regulations. These also included several outstanding violations from previous sportsbook operator PointsBet. Fanatics acquired PointsBet’s U.S. assets, which included a New Jersey sports betting license, in June 2023.”
New York Bill Would Restrict AI Use In Gambling Therapy (GamblingHarm): “Proposed legislation in New York would address the use of artificial intelligence (AI) in therapy — including treatment for gambling addiction. As of late 2025, New Yorkers and visitors to the state have wagered $72.8 billion on sports gambling since 2022, according to state figures compiled by Legal Sports Report. With over 50% of online bettors chasing losses, demand for addiction resources is growing. The New York legislation could affect technology and telehealth startups trying to develop AI chatbots to help treat gambling addiction amid the growing crisis.”
Las Vegas tries to entice visitors back to city amid declining traffic (SBC Americas): “Las Vegas’ official destination marketing organization is optimistic that the resort city will see an upswing in tourism in the coming weeks, but a new TV advertising spot has received mixed reviews. Amid widespread coverage of Vegas and its casino resorts suffering a fall in tourism this summer, the head of the Las Vegas Convention and Visitors Authority (LVCVA) is confident that the fall calendar, such as the return to play of the Las Vegas Raiders and the Canelo Álvarez vs. Terence Crawford fight, will rectify the slump.”
“I’ve said a number of times that, in the summer months for us, we are very reliant on leisure tourists,” LVCVA President and CEO Steve Hill said recently. “We don’t have the same business lineup, we don’t have the same sports lineup in the summer that we do the other nine months of the year. Those kinds of events drive visitation.”
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