The Bulletin Board

• THE LEDE: What will SCOTUS consider if it hears a prediction market case?

• ROUNDUP: A look at the stories you may have missed.

• NEWS: Canada makes it clear where it stands on prediction markets.

• AROUND the WATERCOOLER: Gambling ads need to go.

• STRAY THOUGHTS: Another reason to become a paid subscriber.

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The Lede: The Legal Questions SCOTUS Will Consider

If the Supreme Court takes a prediction markets case (which is exceedingly likely at this point), it will likely decide the case on two overarching questions, which are the meat of this entry.

The Third Circuit and the Ninth Circuit are split on Question #1: Are sports contracts swaps? Question #2, does the Commodity Exchange Act (CEA) preempt state gaming laws, only comes into play if the contracts are deemed to be swaps.

However, there is a third “sleeper” SCOTUS can consider, which I’ll outline in a moment.

Question #1: Are sports contracts “swaps”?

The crux of the case is this: Prediction markets and the Commodity Futures Trading Commission (CFTC) claim the CFTC has exclusive jurisdiction over swaps on a designated contract market (DCM).

If sports contracts are deemed swaps, states are likely on the outside looking in. If they are not swaps, state-level gaming laws apply.

Kalshi and the current CFTC read the definition of swap and the CFTC rules governing them broadly, which makes almost anything a swap, so long as it is offered on a licensed DCM.

Earlier this year, the Third Circuit agreed with that assessment, finding in KalshiEX LLC v. Flaherty that sports event contracts on CFTC-licensed exchanges are swaps, and the CFTC has exclusive jurisdiction.

Last week, the Ninth Circuit disagreed, and ruled in KalshiEX LLC v. Assad that they are obviously sports bets, and that calling them event contracts does not change what they are.

That circuit split all but ensures a date at SCOTUS, and brings us to the overarching question that no one really knows the answer to: Will SCOTUS read the definition broadly or will it choose a contextual reading that keeps sports betting (and other forms of gambling) firmly under the control of state laws?

And that brings us to Question #2.

Question #2: If they are swaps, does the CEA preempt state gaming laws?

Winning the “what is a swap” debate is one of the bars Kalshi must clear. Both circuits largely agreed that if it is a swap on a DCM, exclusive jurisdiction applies. They disagreed on whether sports contracts meet that threshold (Question #1). Of note, these were preliminary-injunction rulings, not merits rulings.

But Kalshi also needs to establish preemption to declare a total victory.

Federal preemption can happen in three ways:

1. Express preemption is when Congress plainly says federal law supersedes state law. Kalshi says the CEA’s exclusive-jurisdiction clause is exactly that.

2. Field preemption is when Congress writes a law that doesn’t expressly say states can’t pass their own laws, but the federal scheme is so pervasive that it leaves no room for states — which is what the Third Circuit said, once a product falls into the realm of a swap on a DCM, states are cut out.

3. Conflict preemption is when you cannot obey federal and state laws at the same time, or when the state rule blocks what Congress was trying to do.

Kalshi argues “exclusive” means exclusive, while states have pointed to savings clauses in the CEA as evidence that Congress left room for complementary state law. And then there is the Special Rule itself, which lists activity ‘unlawful under any Federal or State law’ as a category the CFTC may deem contrary to the public interest.

The Ninth Circuit, as well as courts in Maryland, Utah, and New York, agree with the states, that there isn’t conflict preemption, that Kalshi can comply with state and federal law.

Another hurdle that I’ll address later this week is the major-questions doctrine. As attorney Daniel Wallach noted, Congress regulated sports betting by name in the Wire Act and PASPA. If Congress wanted the CFTC to run national sports betting, it would say so. It did not do that in Dodd-Frank.

Question #3: What do the Special Rule and Regulation 40.11 do?

In my opinion, Rule 40.11 is how SCOTUS might ultimately decide the case, as it doesn’t slam the door in either direction.

Recall that in PASPA, SCOTUS left the door open for Congress to regulate sports betting. Justice Samuel Alito’s majority opinion in Murphy v. NCAA reads in part:

“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not.”

Murphy left the policy choice to Congress, which hasn’t acted. Kalshi’s play is that Dodd-Frank already made the choice, or that rewritten Rule 40.11 will. Of interest, that would mean no one involved in the PASPA case (not the high-powered legal teams or the justices) pointed out that maybe Congress already had authorized sports betting in Dodd-Frank.

Dodd-Frank says the CFTC may determine that certain event contracts are contrary to the public interest if they involve gaming, war, terrorism, assassination, or activity that is unlawful under federal or state law.

Exact phrasing here:

“In connection with the listing of agreements, contracts, transactions, or swaps in excluded commodities that are based upon the occurrence, extent of an occurrence, or contingency (other than a change in the price, rate, value, or levels of a commodity described in section 1a(2)(i) of this title), by a designated contract market or swap execution facility, the Commission may determine that such agreements, contracts, or transactions are contrary to the public interest if the agreements, contracts, or transactions involve—(I) activity that is unlawful under any Federal or State law;(II) terrorism;(III) assassination;(IV) war;(V) gaming; or(VI) other similar activity determined by the Commission, by rule or regulation, to be contrary to the public interest.”

The implementing rule, 40.11, goes further, saying a registered entity “shall not list” contracts that involve, relate to, or reference gaming.

The two sides have diametrically opposed opinions on how all of that should be read.

The states argue Congress put “gaming” (along with war, terrorism, and assassination) inside an overarching framework of should-be-prohibited contracts, and the CFTC’s own rules expressly prohibit these contracts, with the against-the-public-interest rule reserved for fringe cases that may abut these categories.

On the other side of the coin, Kalshi and the CFTC argue that all contracts on the prohibited list are to be treated individually, and the CFTC can decide if they are allowed or not, given the “may” in Dodd-Frank.

Judge Lee’s concurrence in the Ninth Circuit hits on this very point, as he noted, the statute says the Commission “may determine” a gaming contract is contrary to the public interest, implying there is discretion to allow some gaming contracts — but Judge Lee said the Court need not resolve that, because the existing regulation bars them now. So unlike in Murphy v. NCAA, in this case Congress or amended CFTC rules could tip the scales in Kalshi’s favor.

And that isn’t a hypothetical. The CFTC is working on amending its rules in a way that sports would count as “gaming,” but game-outcome and many prop-type contracts would survive a public-interest review.

That makes the CFTC’s pending amendments quite important, as states and tribes are likely to attack the amended rules, opening yet another legal front.

SCOTUS could narrowly decide the case solely on 40.11, leaving the “what is a swap” question for another day. It’s the Alito argument from PASPA: Congress can do it directly, but until it does, the states are free to act on their own.

Upshot

Kalshi has to win on both Question #1 and #2, unless the Court takes the 40.11 off-ramp.

And one other consideration: A Kalshi win against states would not reach into tribal cases. Tribal cases under IGRA would still be open — more on that later this week.

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Roundup: So Much News; So Little Newsletter Space

Bet365’s online casino goes live in West Virginia [Press Release]: Bet365’s sportsbook and online casino went live in West Virginia last week. The bet365 sportsbook is now live in 18 states, and West Virginia is the fourth state it has launched its online casino product in. In the press release, bet365 pointed to the launch as “continuing on a path of strategic growth across the country, entering mature markets with high-quality features for bettors.” Bet365’s US strategy is something STTP has touched on in the past, here and here.

Atlantic City could lose up to 35% of its casino jobs by 2035 [Press of Atlantic City]: “The Atlantic County Economic Alliance, a nonprofit economic development corporation established in 2017 for business attraction, retention and marketing efforts in the county, released a report Tuesday outlining the potential damage from casino expansion, and other factors including the continued growth of internet gambling and stubborn inflation. The group…said a ‘baseline scenario’ of New York casino expansion and other factors could cost Atlantic City 5,100 casino jobs and nearly $815 million in lost revenue by 2035.”

18-21 year-olds have wagered close to $4B on Kalshi [CNN]: “Young adults between 18 and 21, who are legally barred from most gambling in the US, have traded an estimated $5.4 billion so far this year on the Kalshi prediction market, according to a new CNN analysis… The CNN analysis found that Kalshi users between 18 and 21 have traded an estimated $3.9 billion in those categories [sports] this year – and that’s expected to rise.” Kalshi declined to comment or provide data on its 18-21 year-old users.

Sportradar and Polymarket expand strategic relationship [Press Release]: “Sportradar and Polymarket announced a significant expansion of their strategic relationship extending Sportradar’s premium sports data, streaming and integrity services to Polymarket across more than 20 sports leagues and competitions representing approximately 300,000 matches annually. Under the U.S. agreement, the expansion adds premier global leagues including the Bundesliga, Euroleague Basketball, the Chinese Basketball Association (CBA), the National Basketball League (NBL), Tennis Grand Slams, and UTR Pro events, among others, deepening Polymarket’s coverage across soccer, basketball, and tennis, backed by the deepest and broadest sports data and content portfolio in the industry.”

NFL renews deals with FanDuel and DraftKings, adds Fanatics [Press Release]: “The National Football League today announced it has reached commercial agreements with three leading sports betting operators ahead of the 2026 season. DraftKings and FanDuel, partners in the category since 2021, each signed a multi-year deal. Fanatics Betting and Gaming also signed a multi-year agreement, expanding a relationship with the NFL that includes collectibles and official league merchandise. As part of these multi-year deals, all three partners will have the ability to leverage NFL marks within the sports betting category and promote online and retail sports betting. They will also have presence at NFL tentpole events such as the Super Bowl and NFL Draft, unique hospitality and VIP experiences and integrations across NFL-owned digital media properties. Finally, they will have access to real-time, official play-by-play statistics, proprietary Next Gen Stats and BetVision through Genius Sports, the league’s exclusive data distribution partner.”

News: Canada Says No to Prediction Markets… For Now.

Prediction markets have landed in Canada (Kalshi’s partnership with Toronto-based Wealthsimple), but don’t expect sports contracts anytime soon, as financial regulators have issued an advisory that sports and entertainment contracts do not meet the standards of securities or derivatives.

As reported by Tom Nightingale for Canadian Gaming Business, “The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) said they posted the public notice to explicitly state their views on sports event contracts ‘in light of growing interest in prediction markets in Canada.’”

The notice to staff reads in part (bold mine):

“In light of growing interest in prediction markets in Canada, this Notice focuses on Event Contracts based on sports or entertainment events or outcomes and sets out CSA and CIRO staff’s views on the applicable regulatory framework for those products. Further guidance on Event Contracts based on other types of events will follow.

“CSA staff recognize that Event Contracts may fall within the broad definitions of securities or derivatives under securities and derivatives legislation. However, securities and derivatives legislation, related rules, and guidance, contemplate that certain instruments are outside the scope of that framework, or are otherwise excluded, depending on the facts and circumstances. CSA staff’s view is that Event Contracts based on sports and entertainment events or outcomes should not be regulated within securities and derivatives legislation.”

The Canadian Gaming Association applauded the notice, saying in part:

“The Canadian Gaming Association welcomes today’s guidance from CSA and CIRO staff,” CGA CEO Paul Burns said in a statement. “It brings clarity to a question that matters a great deal to Canadian consumers, provincial governments, and the licensed gaming industry: sports wagering is sports betting, whatever the platform, and it belongs within the framework that provinces have built specifically to regulate it.”

At the provincial level, Loto-Québec issued its own press release on prediction markets:

“Following the publication of the most recent notice from the Canadian Securities Administrators (CSA), Loto-Québec would like to reiterate that, in Québec, there is no ambiguity: the only 100% legal casino and sports betting website is lotoquebec.com. Regardless of the platform — whether it’s a gaming website or a prediction market website offering event contracts related to sports and entertainment--if it’s not Loto-Québec, it’s not legal.”

The guidance is clear, but I would caution that the “broad definitions” admission could lead to future problems, as a shift in regulatory view or leadership change could reopen the issue.

Around the Watercooler

Social media conversations, rumors, and gossip.

Here’s why I’m full on board with a blanket advertising ban (from David Purdum’s excellent article on a pseudonymous gambler named Amit):

“But Amit had one request: no betting ads in a story about him. Some recovering gambling addicts say they’re hesitant to watch sports anymore, worried that a sportsbook ad or a reference to betting odds will trigger a relapse. Last season, NFL games on national TV averaged two betting-related commercials, though some primetime games had up to five, according to iSpot.TV, a company that measures TV and video ads.”

The ability to wager on sports isn’t new, it was happening before PASPA was repealed in 2018. What is new is the way it has permeated every aspect of our lives.

The non-stop barrage of gambling ads when people aren’t even thinking about gambling (like when they’re watching a game) is certainly one example of this, an example we could quickly get rid of.

Basically, we need to stop pretending that 24/7 in-your-face betting on everything is some anti-black market measure. If people want to bet, so be it. We don’t need to beat them over the head with it all day long.

Stray Thoughts

Consider upgrading to paid. Not only will you unlock a large amount of paywalled content, but I spent the last two days moving kids into college, and every little bit helps!

In a 3-0 ruling, the Ninth Circuit ruled against Kalshi, affirming a lower-court ruling that dissolved Kalshi’s preliminary injunction and cleared Nevada to enforce its gaming laws against Kalshi’s sports event contracts.

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The Ninth Circuit ruled that Kalshi’s sports event contracts are not federally regulated swaps under the Commodity Exchange Act (CEA). They are sports bets.

The opinion, written by Judge Ryan D. Nelson and joined by Judge Bridget S. Bade, with a concurrence from Judge Kenneth K. Lee (all three are Trump appointees), didn’t pull punches.

Nelson wrote that it is disingenuous for Kalshi to deny that the contracts are sports bets under a reasonable person’s understanding, and that everyone, including Kalshi, knows a sports bet when they see it. The “including Kalshi” is interesting, but not surprising given the first sentence of the opinion reads: “KalshiEX, LLC advertises itself as ‘the first app for legal sports betting in all 50 states.’”

The decision also pointed to CFTC Regulation 40.11, which already prohibits listing contracts that involve or reference gaming — the CFTC is currently trying to amend these rules.

From the decision:

“Because we disagree with Kalshi’s overly broad reading of the CEA, and because CFTC regulations currently prohibit offering contracts related to gaming on prediction markets, we affirm the district court’s order dissolving the injunction as to sports event contracts. We remand for the district court to consider Kalshi’s election contracts.”

And We Have a Split

Before the Ninth Circuit decision, the Third Circuit was the only appellate court that had issued a ruling (a 2-1 split), and that ruling was in favor of Kalshi, with the Third Circuit finding that Kalshi’s sports event contracts are federally regulated “swaps” that preempt state gambling laws.

The Ninth Circuit ruling creates a circuit split with the Third Circuit, which makes Supreme Court review more likely, and potentially faster than it was before.

Of note, New Jersey has dragged its feet in filing a SCOTUS appeal. After the Third Circuit’s April decision, the state obtained extensions from Justice Samuel Alito, and explicitly flagged that it was watching other circuits, likely waiting for precisely this moment.

This is the moment it appears to have been waiting for:

And SCOTUS is likely to get involved, as the circuit split creates a massive conflict; sports contracts are now treated as traditional sports bets (regulated by states) in the Ninth Circuit and as federally preempted swaps in the Third Circuit. Further, the question at hand is an extremely important one: Does the CFTC have exclusive jurisdiction over a product (that generates billions of dollars) that has traditionally been regulated at the state level as gambling?

The billion-dollar question is: When will SCOTUS take the case?

Whether it is granted for the 2026–27 term or slips to 2027–28 will depend on how quickly the parties move and whether the Court wants to wait for other circuits to issue a ruling.

Kalshi’s Options

There is a caveat to all of this, as Kalshi could first seek en banc rehearing in the Ninth Circuit, which, if granted, would add months to the process. En banc review is rarely granted, and a unanimous 3-0 decision from the Ninth Circuit panel makes a reversal even less likely.

As attorney Daniel Wallach noted:

And if you want to know why this is an extremely important development, look no further than this:

There is also a subplot:

The Bulletin Board

• THE LEDE: An adverse ruling in CT could lead to Kalshi getting the boot in NY.

• THE READING LIST: A look at the articles Straight to the Point is reading.

• NEWSLETTER ROUNDUP: The best of the best in gambling newsletters.

Share

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The Lede: Could Kalshi Lose New York?

The newsletter has been heavy on prediction market news this week, and somehow there are several threads I haven’t even touched, but will get to below.

Prediction markets (led by Kalshi) could be the most polarizing product I have ever encountered. While they continue to gain acceptance — signing deals with professional sports teams and seeing even more financial institutions jump into the space — they are being squeezed out of states and, based on the responses to MLB deals, do not seem to have a lot of public support, despite being a popular product.

The polarization is likely to increase given the New York Times reporting that Donald Trump Jr. told Republican state attorneys general to “back off” prediction markets in March (a message that doesn’t seem to have landed), and that North Carolina lawmakers received “input” from the White House on the provision in its recently passed state budget that signs off on prediction markets, without any additional state licensing, registration, or regulatory requirements, provided they comply with the federal Commodity Exchange Act, while taxing them at a whopping 6%. Kalshi did push back on the reporting:

All that said, the big news today is Connecticut’s new civil enforcement action, and what it means for the larger Second Circuit fight that already has Kalshi on the ropes in New York — Kalshi also received an adverse ruling in Montana on Thursday, when a federal judge denied its preliminary-injunction motion without prejudice and lifted a stay.

As reported by attorney Daniel Wallach on X, “Connecticut has filed a civil enforcement action against Kalshi in Hartford Superior Court, seeking injunctive relief, disgorgement, restitution and civil penalties against Kalshi for operating an illegal sports wagering service.”

As it has done in every other instance, Kalshi removed the case to federal court. That said, that tactic has yet to pay off. As Wallach noted, “Reality check: Every removed civil enforcement action has been remanded back to state court.”

Here’s why this is a big deal.

Connecticut and New York sit in the same federal circuit (CA2). Kalshi has already been denied preliminary relief in federal court in both states, and New York’s attorney general has a separate enforcement case. A Connecticut win does not immediately cost Kalshi New York, but a Second Circuit loss would. Further. a fast remand of the Connecticut case would also undercut Kalshi in New York.

And put simply, New York would be a huge blow. Kalshi has already had to ring-fence Nevada, Washington State, and Michigan, with populations of ~3 million, ~8 million, and ~10 million. New York’s population nearly matches that combined total at ~20 million.

One More Prediction Market Item

Finally, I posted the newsletter below on Tuesday, pointing out the (many) similarities between sports contracts at prediction markets and player-banked table games at California cardrooms. The article was well-received enough that I’m posting it again for anyone who missed it:

The Reading List: Suggested Reading from STTP

• As Hawaii Studies Lottery, Key Question Arises [Lottery Geeks]

• Victor Strategies EVP Gene Johnson: Prediction Markets ‘Biggest Scam I’ve Ever Seen’ [Casino Beats]

• Future of prediction markets expected to be decided by U.S. Supreme Court [CDC Gaming Reports]

• Prediction Markets Have Broken The Sports Betting Information Business [InGame]

• An interesting mashup in the responsible gambling space:

  Regen's Substack

  Regen and Birches Health Join Forces on Responsible Gambling

  CHICAGO, IL (August 27, 2026) – Regen, the automated savings platform built for sports bettors, today announced a partnership with Birches Health, the leading national provider of specialized treatment for gambling addiction. Regen users will have direct access to clinical care from Birches Health, and the two companies will jointly run responsible gami…

  Read more

  5 days ago · Regen

Regen’s Daniel Prior was a guest on the Straight to the Point Talking Shop Podcast in June:

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Newsletter Roundup: Best of the Week in Substack Land

The Event Horizon

Hedging/Trading/Betting On Whether Athletes Play

What sports events have more economic impact than how many points a player scores, or which team wins a single game…

Read more

7 days ago · 7 likes · Dustin Gouker and Eric Ramsey

Earnings+More

Plumbed in

Block party: Cantor Fitzgerald’s deal with Kalshi and Susquehanna to offer block trading of event contracts to institutional clients is the latest bridge between prediction markets and Wall Street, a…

Read more

6 days ago · 7 likes · Earnings+More

Vaughan's Substack

Why Racing Needs Bookies

There is a story that has settled into British racing’s account of itself, and it goes roughly like this. Horse racing is a magnet. It has the history, the terrestrial coverage, the Saturday afternoons and the festivals that persuade people who don’t otherwise gamble to have a bet. Bookmakers use that magnet to acquire customers cheaply, and then, havin…

Read more

6 days ago · 3 likes · 1 comment · Vaughan Lewis

Gaming News Canada

What we know today about prediction markets, Canadian style

Read more

6 days ago · 15 likes · Steve McAllister

Gaming News Canada

How AI and regulation Are reshaping sports betting and iGaming

Watch a video of this podcast or listen on your preferred podcast app…

Listen now

7 days ago · 2 likes · Steve McAllister

Range Advantage

#19: Brazil is Poker's Perfect Training Ground

Disregard the poker: Brazil is truly heaven on Earth. Brazil has the best food, the best weather, the best beaches, the most intense football (soccer) scene, unbelievably cheap living, and the most beautiful, welcoming, friendly people imaginable. I will probably spend my final days here when all is said and done…

Read more

7 days ago · 5 likes · 2 comments · Blaise Bourgeois

Boys & Men Online

When investing starts to look like gambling

Thirty-eight percent of men ages 18 to 29 say they have invested in, traded, or used cryptocurrency. That’s more than twice the share of women in the same age group, as Diego Nunez and I note in a new research brief, “Young men and cryptocurrency: What the evidence shows…

Listen now

8 days ago · David Sasaki

Secure Stakes by Matthew Wein

Six Months, Dozens of Risks, and Some Emerging Themes

Speed Read (Get the headlines here and read on below…

Read more

8 days ago · 2 likes · SecureStakes

The Bulletin Board

• THE LEDE: Win or lose, prediction markets will leave their mark.

• ROUNDUP: A look at the stories you may have missed.

• ALTRUDA ANALYZES: How much did IL per-wager fee generate in Year 1?

• AROUND the WATERCOOLER: Two more legal issues PMs are wrestling with.

• STRAY THOUGHTS: Bad habits.

Share

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After more than 20 years at the forefront of iGaming, Play’n GO is bringing its world-famous games to land-based spaces, too.

Play’n GO’s unrivalled portfolio of some of the world’s most played online casino games is now available for physical casinos, giving operators the opportunity to harness the power and growth of online casino to bring a new demographic of players into their brick and mortar spaces for the very first time.

With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

The Lede: What Will Kalshi’s Legacy Be?

Legacy gambling companies are preparing for life with or after prediction markets, and truth be told, the two futures don’t look overly different.

As InGame recently noted about BetMGM’s latest app update, it has the fingerprints of prediction markets all over it, including improved cash-out features and less lag for in-game wagers. But the most “prediction-influenced” design changes are the ability to see odds as probabilities and “graphs showing how the cash-out value of a bet has changed over time.”

BetMGM Product Management Leader Brittany Dunbar told InGame the new probability odds option was borne out of conversations with their customers. “We’ve talked to our players a lot this past year, around prediction markets for those who dabble in prediction markets,” Dunbar said. “What do they like? What do they not like? So we’re trying to glean some of those learnings and pull through what makes sense into our experience. So probability odds is one of those new features that we’ll be introducing.”

Napster may no longer exist, but the specter of the company is still with us.

Napster forced the music industry to accelerate its entry into a digital music world and helped birth Spotify and other music streaming services.

The labels did not become Napster, but it was clear that Napster had changed consumer behaviors around music: I want it now, and cheap!

Prediction markets are already having a similar impact. Whether or not Kalshi is still standing in five years doesn’t matter. Consumers are showing a preference for probability odds, cashing out of a bet at any point, and tracking odds changes in real time.

DraftKings, FanDuel, and Fanatics have taken the prediction market plunge, and are likely to integrate product features that resonate with customers into their sportsbooks, but even the sideline sitters like BetMGM are still borrowing UX from Kalshi and other prediction markets.

Legacy sportsbooks don’t have to adopt the legally contested parts of the prediction market business model. They can simply borrow the features customers like.

Napster’s legacy was not that the pirates (file-sharing) won. It was that scarcity of product stopped being acceptable. Similarly, a sportsbook that uses American odds and friction-filled cash-outs and in-game betting starts to feel like a record store in the mid-2000s.

So the industry is preparing for two futures.

First: Prediction markets win and are competitors, with sportsbooks and prediction markets pushing each other’s products to new levels.

As I said nearly a year ago:

“Think of it this way: If FanDuel, DraftKings, BetMGM, Caesars, bet365, and Underdog can all offer prediction markets on sports, then it’s just another product in a crowded marketplace that is also competing against traditional sportsbooks, DFS, sweepstakes, and everything else. The advantages of being a prediction market evaporate, and it becomes a battle of UX, marketing budgets, and brand recognition.”

The second: Prediction markets lose in court and fade away, but the UX features that made them a threat get folded into legacy sportsbooks.

Either way, the old store does not get to stay the old store.

Roundup: So Much News; So Little Newsletter Space

Kalshi deals with two MLB teams are not exclusive [Front Office Sports]: “Although Kalshi’s press release originally described all the deals as “exclusive, multi-year brand partnerships,” two of the deals—with the Braves and Giants—are not exclusive, two sources tell FOS. Those teams can enter into other prediction-market partnerships if they so choose. A representative for the Giants confirmed to FOS that the deal is not exclusive.”

Caesars shareholders to vote on Fertitta takeover next month [CDC Gaming Reports]: “Caesars Entertainment shareholders will gather inside a conference room at the Eldorado Resort in Reno next month to vote on whether to accept a $17.6 billion buyout offer from Fertitta Entertainment. The deal, which would take one of Nevada’s largest casino operators private, includes roughly $5.7 billion in equity value and $11.9 billion in assumed debt. Tilman Fertitta’s company offered $31 per-share for Caesars.”

NJDGE dings Caesars Digital with $250k fine [Sports Betting Dime]: The New Jersey Division of Gaming Enforcement handed Caesars Digital one of the largest fines ever issued to an online operator: “The New Jersey Division of Gaming Enforcement issued the action on Aug. 5, 2026. Caesars Sportsbook accepted the penalty, according to the department, which includes a $251,250 fine, and an additional disgorgement of $45,465.38.” According to the DGE, Caesars “allowed self-excluded individuals to maintain active accounts through its websites, failed to properly add self-excluded individuals to the New Jersey Division of Gaming Enforcement’s self-exclusion list, and permitted users to exceed their established deposit limits.”

And in the ‘How Can This Getting Any Weirder’ category:

The Closing Line

We Might Get A House Hearing On Little League Baseball Betting

A Congressman is up in arms about offshore sportsbooks that offer betting on the Little League World Series…

Read more

5 days ago · 8 likes · Dustin Gouker and Eric Ramsey

Quote of the Week: “Polling can exist without prediction markets. Prediction markets cannot exist without polling. There is some value to them directionally, but there are some very clear weaknesses … It’s just more like a conversation starter if you’re not involved in the campaign. Or, it’s a discourse generator.” ~ Adam Carlson, a progressive pollster and prolific political poster

Altruda Analyzes: IL Per-Wager Fee Generates $126.7 M in First Fiscal Year

The Illinois Gaming Board reported $10.9 million in wager surcharge remits from the state’s 11 mobile sportsbooks for June on Monday, completing the fiscal year with $126.7 million in the first year it was enacted.

That was more than triple the $40 million estimated as part of the $55.1 billion Illinois state budget Gov. J.B. Pritzker signed into law in June 2025. The surcharge, $0.25 on each mobile operator’s first 20 million wagers in the fiscal year and $0.50 above that, was met largely with outrage by stakeholders – more so after the state changed taxes on adjusted gross revenue from a flat 15% to a progressive one with a floor of 20% and ceiling of 40% based on revenue tiers the previous year. The state’s mobile operators all enacted some sort of countermeasure to try and create a buffer to mitigate costs.

Only FanDuel and DraftKings reached the 20 million wager threshold, doing so early in the fiscal year.

Around the Watercooler

Social media conversations, rumors, and gossip.

Earlier this week, I outlined two legal issues prediction markets face and teased two others. Well, here are the others:

Legal Issue #3 comes from the Maduro insider trading case, where the defendant is claiming exactly what states are: prediction market contracts are not “swaps.” That could give states another ruling to point to, but at the same time, since the case is not about sports (it’s prediction markets more generally), a negative ruling doesn’t hurt their case.

Legal Issue #4 is a drum I’ve been banging for quite a while: In Murphy v. NCAA (PASPA) the Supreme Court seemed pretty adamant that Congress had not regulated sports betting, nor did it offer the solution of looser interpretations to existing laws by a governmental agency, which doesn’t bode well for Kalshi’s chances at the top court.

Stray Thoughts

This seems problematic:

The Bulletin Board

• THE LEDE: Kalshi inks deals with five MLB teams.

• ROUNDUP: A look at the stories you may have missed.

• VIEWS: Prediction Markets giveth (to pro bettors), but will they taketh away?

• AROUND the WATERCOOLER: Kalshi dominates the prediction market space.

• STRAY THOUGHTS: WSJ signs off on AI articles.

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With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

The Lede: MLB Teams Partnering With Prediction Markets

Professional sports teams have been largely resistant to prediction market partnerships, but it appears that any resistance to prediction markets among Major League Baseball (MLB) teams has subsided.

First, there was Novig’s deal with the New York Mets and Polymarket’s deal with the New York Yankees. And now, we have Kalshi partnering with five MLB teams:

Several of the partnerships were first reported by Sportico before the official announcement, which noted the rollouts were “muted,” perhaps to avoid “the kind of embarrassing backlash that befell the New York Mets a few weeks ago. The Mets’ July notice of a partnership with prediction market app Novig received a swarm of angry replies from fans on X. Even after the Mets deleted their original post and tried another, frustrated responses greatly outnumbered likes.”

And how will regulators in these states (many of which are involved in active litigation against prediction markets)?

What we do know is how fans view these deals:

And if you thought Mets fans were unkind wait until you see how Red Sox fans reacted:

And since we are on partnerships: There is also this from Front Office Sports:

“The Athletic and Kalshi are in serious talks for a sponsorship deal, sources tell Front Office Sports. Multiple sources say The New York Times-owned sports outlet and Kalshi are in advanced talks. However, no deal is finalized, and The Athletic has actively held discussions with multiple betting and/or prediction-market companies since its deal with BetMGM expired earlier this year, one source tells FOS. The identities of others in talks with The Athletic were not clear.”

Roundup: So Much News; So Little Newsletter Space

West Springfield grant increases first responders [WWLP]: “The Town of West Springfield has received a $132,900 grant from the Massachusetts Gaming Commission’s Community Mitigation Fund. The Community Mitigation Fund was established under the state’s Expanded Gaming Act to assist municipalities in offsetting municipal costs tied to casino construction and operations.” West Springfield’s grant is tied to an increase in first responders. “To manage increased calls for service since MGM Springfield opened, West Springfield expanded its public safety workforce. Between the fiscal year 2017 and 2026 budgets, the town increased its firefighter and EMT staff from 48 to 56 positions, police patrol officers from 60 to 71, and emergency dispatchers from five to eight.”

Another New Hampshire casino expansion [Union-Leader]: As I’ve covered numerous times in the newsletter, New Hampshire’s charitable casino industry has gone from small-scale to full-fledged casinos in short order. The latest example is a recently approved expansion project at Revo Casino, “Which includes redeveloping five lots (formerly three lots) into a single lot of record for an expanded 73,000-square-foot charitable gaming facility with two restaurants and a function room.”

Venetian hit with $7.2 million fine by NV regulators [Las Vegas Review-Journal]: The Nevada Gaming Commission on Thursday fined Venetian Las Vegas Gaming LLC, doing business as The Venetian Resort Las Vegas, $7.2 million for the property’s failure to stop an illegal bookmaker from playing at the casino between 2019 and 2021.” The fine is a result of an investigation Apollo Global Management inherited when it purchased the property from Las Vegas Sands, is the sixth highest ever issued, and once again involves illegal bookmaker Mathew Bowyer. Per the LVRJ, Bowyer was also “a key figure in three previous violations involving three other Strip operators. State fines over his activities now total $34 million.”

Nebraska Secretary of State certifies online sports betting ballot initiatives [Press Release]: “The Secretary of State’s office announced today that signature thresholds have been met for both the Online Sports Wagering Authorization Constitutional Amendment petition and the Online Sports Wagering Regulation Initiative petition to appear on the 2026 general election ballot.” Previous STTP coverage of the ballot initiative.

Uruguay legislation would legalize online gambling [Yogonet]: “Uruguay’s Chamber of Operators and Lessors of Casino and Entertainment Hall Services (CUOASEC) has submitted a bill to the Executive Branch to regulate online gambling… The bill would require state authorisation for all online gambling activities and allow only licensed operators under regulatory oversight. It would also restrict unauthorised providers.”

Ontario fines Boom Gaming for violating auto-play ban [Canadian Gaming Business]: Ontario regulators fined Boom Gaming “after finding that the banned auto-play feature was available to Ontario players for several months on multiple slot games hosted on a licensed operator’s platform,” (online slot users in Ontario must manually initiate each spin). “The Alcohol and Gaming Commission of Ontario (AGCO) said on Thursday, Aug. 20, that it ordered $70,000 in monetary penalties against the gaming supplier.” STTP Thoughts: Five US online casino states (Michigan, West Virginia, New Jersey, Connecticut, and Pennsylvania — Rhode Island and Delaware do not) have auto-play restrictions where auto-play is not permitted unless authorized by the gaming regulators.

Gambling firms waste marketing dollars on bots and ads to current users [Casino Beats]: “In a report released earlier this month, the company [Ad verification platform TrafficGuard] noted that gambling companies spent over $200 million on ads during the World Cup.” However, as TrafficGuard COO Matt Sutton told CasinoBeats in an interview this week, “As expected, the World Cup saw a massive amount of increased ad spend. This led to a massive increase in the amount of registrations, a massive increase in deposit volume, and deposit value, but also an increase in wasted spend on returning users and wasted spend on bots… In total, the company estimates that 22% of ad spending goes to traffic that brings zero dollars back to the company.”

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Views: Will Prediction Markets Let Down Pro Bettors?

The prediction market discourse is often lively and almost always filled with half-truths. A great example of this is a recent exchange between Philip Atkinson, the CEO of Unrational Games and longtime PokerStars employee (as well as a Straight to the Point podcast guest), and professional sports bettor Jack “Captain Jack” Andrews, who responded to the following Atkinson tweet:

Atkinson posted a lengthy reply (his first tweet was a tongue-in-cheek, but still accurate overview of the climate), explaining that while the cultures may differ, bettors are the same the world over, particularly when it comes to EV bettors (summarized below):

“There are obvious cultural differences between the US and European populaces, but to assert that capitalism and greed are going to drive Kalshi somewhere different from the equilibrium Betfair reached is, I think, to get two things wrong.

”The first is a category error: the sub-populations of sports bettors/gamblers on the two continents are probably far more alike in terms of capitalistic tendencies (and dare I say, greed) than they are distinct. Gamblers are gamblers, whatever their flag.

”The second is that greed really does decide the outcome, but in a different direction. It is capitalism and greed which drive the equilibrium state for the likes of DraftKings and Kalshi, and it was the same for Betfair.

“… Everyone wants to trade against the level below them and avoid the level above, so each recreational player who churns leaves the next level up facing worse counterparties, who trade less or leave in turn, and so on up the chain.”

I’ve written extensively about the challenges peer-to-peer gambling faces, as the users and the provider have misaligned goals. As I said in December 2025: “The problem P2P gambling has always had is that the sharks don’t care about the ecosystem’s health; that’s the operator’s problem. They’re not into sustainable fishing. They’ll fish until there’s nothing left, leaving the pond empty and the operator scrambling to restock it (at massive costs).”

It’s easy to restock the pond when there is Boom (and prediction markets are in the Poker Boom phase of their lifecycle). When new customers are falling out of the sky, the peer-to-peer model can appear to be a playground of sorts for professional bettors/traders; a never-ending supply of people willing to flip a coin at +125 odds.

That’s fine if there are two users waiting in the wings for every user who swears off the product, but as I wrote in May, “In a zero-sum game where the facilitator takes money from the ecosystem, you need a constant influx of money to maintain a sustainable ecosystem; customers who are happy to lose and keep depositing. Finding that balance is challenging, but not impossible.”

When things slow down, whether from market maturity or churn, the trouble begins.

And because of the misaligned goals, you get a small percentage of users overindulging on the rest of your customer base. So instead of, what Alun Bowden termed Happy Losers, you get jaded losers and a shrinking ecosystem. And once all the easy money is chewed up and spit out, that small percentage of winning users grows smaller as some sharks become the prey. And when the customer base shrinks, the facilitator (in this case, prediction markets) needs to increase their levy on the remaining customers, which accelerates many customers’ journey from shark to prey.

As I summarized in my May column: “Prediction markets are still in their Poker Boom phase, with plenty of new fish being added. The concern is: What happens when the fresh supply of fish stops? History tells us that once the low-hanging fruit is picked, things start going sideways, which is why the next 12 months will be good times for all, but after that we’ll find out if these platforms can actually build a sustainable business.”

So, if you’re a professional bettor and championing prediction markets as the best model, just remember that these are for-profit companies, not an altruistic experiment for the benefit of sports bettors. When the Boom phase ends and the constant influx of recreational players slows, operators will find ways to protect their margins, and the “equilibrium” will look a lot like the one Betfair reached.

Around the Watercooler

Social media conversations, rumors, and gossip.

Stray Thoughts

A few days ago, I said I wasn’t sure where to draw the line on AI usage, but this seems like we need Walter Sobchak screaming “OVER THE LINE!” with his faux Pomeranian and Colt pistol.

The Bulletin Board

• THE LEDE: The case for federally regulated prediction markets… and against.

• VIEWS: Better Markets’ Amanda Fischer: PMs “exploiting a moment in time.”

• NEWS: Gambling companies are spending loads of money on state-level races.

• AROUND the WATERCOOLER: Las Vegas still struggling to attract Canadians.

• STRAY THOUGHTS: How George Lucas predicted the future.

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Sponsor’s Message: Play’n GO is launching into land-based casinos.

After more than 20 years at the forefront of iGaming, Play’n GO is bringing its world-famous games to land-based spaces, too.

Play’n GO’s unrivalled portfolio of some of the world’s most played online casino games is now available for physical casinos, giving operators the opportunity to harness the power and growth of online casino to bring a new demographic of players into their brick and mortar spaces for the very first time.

With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

The Lede: PMs and CA Cardrooms Have Striking Similarities

There’s no inherent difference in product between a martial arts school that operates as a for-profit business and one that operates as a 501(c), nor does it matter if it’s a publicly-traded franchise or an owner-operator small business. What’s different is how these businesses are treated by the IRS and regulators (lighter/stricter oversight, different reporting requirements, and eligibility for grants).

Oftentimes that designation puts limits around the product — a non-profit receives tax breaks and can receive tax-deductible donations, but also has stricter rules around employee compensation, advertising, and selling merchandise.

More simply put, the rules are tied to legal structure, not the underlying product.

Which brings me to prediction markets.

The key difference between traditional sportsbooks and prediction markets’ sports contracts is prediction markets are using an exchange model, where customers can offer and accept contracts with other customers. For decades we’ve had a word for peer-to-peer sportsbooks; they were called exchanges.

The problem is, there’s no distinct legal status in the US for exchanges. What Kalshi et al. have done is squeezed their way into an adjacent category that, while it potentially could, was never designed for sports betting.

Post-pandemic, when everything started opening up, martial arts schools (and I believe dance studios) in Massachusetts were lumped in with gyms, not sports. So we got to reopen in June/July, with social distancing rules in place, while youth sports remained on hold. It could have easily gone the other way, and since no one fought it, that’s how it was. If you were to ask me, martial arts schools are a lot closer to a sport than a gym, but we have quite a bit of overlap with the latter, too.

Prediction markets are in the same boat — a boat they forced their way onto. They sure as hell look like sportsbooks, but they also have components of financial products.

So, the overarching question isn’t what’s betting and what’s trading. The real question is about what rules they play under: Should companies offering sports betting exchanges be regulated by states or the Commodity Futures Trading Commission (CFTC)?

Quite frankly, I don’t think either, in its current form, is a good answer. Like a martial arts school, I’m not sure what category it belongs in.

States should be (and should have been all along) more lenient towards exchanges, and the CFTC needs to decide if it’s equipped to become a nationwide sports betting regulator, that, since the product launched before any rules were in place, is playing catch-up and making up the rules as it goes.

The best analogy for what a prediction market is has been happening in California for decades; it’s called player-banked games.

In California cardrooms, the house takes a fee but does not take the other side of the wager, everything is peer-to-peer — of note, third-party-proposition-players have drawn the same criticisms as institutional market makers on prediction markets.

That single structural difference has allowed California cardrooms to offer what most people consider traditional casino games (blackjack, baccarat) under a different set of rules for years. Even though the product looks, feels, and functions a lot like traditional house-banked casino gaming, it’s not… at least according to California’s current rules, which are being hotly contested.

Another interesting parallel is that player-banked games were signed off by one man… Bob Lytle (backstory here).

Prediction markets are doing the same thing with sports contracts: facilitating peer-to-peer trades, while they sit in the middle collecting a fee. So, while the underlying activity is wagering, the legal treatment turns on the structure, or more precisely, how the company positions itself. And until someone decides which category it belongs in, we’re going to keep watching the same mismatch play out.

Views: Prediction Markets “Exploiting a Moment in Time”

Better Markets’ Amanda Fischer was last week’s guest on the Indian Gaming Association (IGA) New Normal Webinar. Fischer stopped by to talk about, what else, prediction markets.

Fischer’s view is similar to mine, as she said that it appears prediction markets and the CFTC are trying to install rules and clarify definitions before a prediction market case reaches the Supreme Court.

As Fischer said during the IGA Webinar:

“They’re having to pivot, they’re doing increasingly novel … strange gambits in court and through the rule-making apparatus to try to just grab at anything they can to get the most done by the midterms (in November) and by the end of President Trump’s term to future-proof their business model from future Congresses or future regulators who might not have such a favorable view.”

“It is obvious that the CFTC and the prediction markets have their lawyers working in concert. They are coordinating. It is the government moving in lockstep with a regulated entity to advance a legal strategy… I cannot think of an example in my career of a federal agency moving so lockstep with firms that are the subject of litigation.”

This aligns with what I said last week:

“The recent spate of court losses seems to have unnerved Kalshi, which doesn’t seem overly confident arguing its self-certify, self-regulate, the CFTC is the be-all and end-all case anymore, and is instead (with some guidance issued by the CFTC) cleaning up its act, at least around the edges.

“The seeming coordination between the CFTC and Kalshi is hard to miss.

“The CFTC has issued several advisories that seem to be aimed at helping prediction markets paint themselves in the best possible light when they have their date at the Supreme Court.”

Fischer also said that prediction markets are exploiting a moment in time, and even if they lose at the SCOTUS, they’ll have “made a bunch of money on it and we paid out our early investors, and nice to know you.” However, that calculus changes if disgorgement is involved.

As Fischer said:

“But where the value proposition changes is if there are disgorgements and penalties for the conduct that occurred during this period. And we’ve seen states be very aggressive in trying to assert that authority, and all of a sudden, it just changes the value proposition if you have to pay that.”

Good reporting on the IGA Webinar can be found here (CDC Gaming Reports) and here (InGame).

News: Gambling Firms Are Spending Big on State Races

As I noted in May, when Bloomberg reported that FanDuel, DraftKings, and Fanatics sank $41 million into a Super PAC to spend on state-level candidates across the country, a lot of money is being spent by gambling firms on state legislative races:

• The Atlanta Journal-Constitution recently reported that “Independent political committees have spent more than $25 million to influence this year’s elections in Georgia… Sports-betting advocates accounted for nearly half the independent spending, pumping $12.3 million into legislative races across the state.

• In North Carolina, the American Conservative Fund spent over $3.5 million on Republican primary elections.

• Spending in Alabama has gotten to the point that, according to AL.com, “A coalition of nine organizations sent a letter to state officials asking for an investigation into gambling-linked campaign contributions flowing to Alabama candidates for Tuesday’s primary.”

• In Pennsylvania (per Spotlight PA), “Gaming and gambling interests whose industries were eyed for new or higher taxes in 2025 have spent $8.1 million and counting in the lead-up to Pennsylvania’s May primary.”

As Eilers & Krejcik Gaming noted, “Win For America has raised $72m this cycle, funded by DraftKings, FanDuel, Fanatics, and bet365,” and based on the states they are spending in, they are playing offense and defense “Offense: pending legalization states such as Georgia and Texas. Defense: already-legal markets including Pennsylvania, Colorado, and Arizona.”

Then there is Virginia, the state that came the closest to legalizing online casinos in 2026. According to Virginia political reporter David M. Poole’s Substack, after five Republican senators broke with their party and voted in favor of online casinos, the Sports Betting Alliance (SBA) “sent each of the five GOP senators a campaign donation of $100,000, according to campaign finance disclosures released last month.” The SBA also donated $100,000 to the bill’s sponsor, Sen. Mamie Locke.

Per The Poole Report, the gaming industry is becoming one of the biggest donors in the state. In addition to the above, it donated $625,000 to Speaker of the House Don Scott, $600,000 to Gov. Abigail Spanberger, $500,000 to the Democratic Party of Virginia, and $300,000 to House GOP Leader Terry Kilgore.

A decade ago, gaming companies donated $17,000 to state legislative candidates in Virginia, which was not enough to crack the Top 100 in industry campaign donations.

By the 2024-25 election cycle, gaming donations soared to $5.2 million, second only to electric utilities in a ranking of donations by industry, according to campaign donation data collected by the nonpartisan Virginia Public Access Project.

This isn’t isolated to online gambling. As I reported in 2024, “Miriam Adelson and Las Vegas Sands have ramped up their already sizable contributions to Texas lawmakers and PACs, “Spreading around $13.7 million in political donations in the first 10 months of 2024,” per Dallas Morning News.

Daily fantasy sports companies were also in on the act in 2024, per Politico:

“California Attorney General Rob Bonta, a Democrat, is currently probing the lawfulness of daily fantasy sports betting in the state, and other prosecutors have issued warnings of deceptive practices by sports betting companies since the Supreme Court overturned a virtual ban on the industry over five years ago. “Over the last year, the fantasy sports industry has given hundreds of thousands of dollars to associations of attorneys general on both sides of the aisle.”

And of course, people keep pointing out donations from commercial casinos and tribal gaming to politicians as they fight against prediction markets:

Final Thoughts: As I noted in May, “This is not new, nor is it limited to the gambling industry. It’s simply the political world we live in… I’d caution that other people donate to these campaigns (sometimes on both sides of the same issue), and political contributions don’t always correspond to actual results,” — The DFS and Adelson donations did not prevent a negative outcome for DFS in California or lead to casinos in Texas.

“Lawmakers receive numerous contributions, and while it might make them more friendly, it doesn’t always mean the issue will shoot to the top of the priority list.”

Around the Watercooler

Social media conversations, rumors, and gossip.

More on Las Vegas:

I’ve written many words about Las Vegas’s value problem:

Stray Thoughts

A while back on LinkedIn I likened AI to Star Wars, saying:

“I recently told someone it’s like Star Wars, there’s a lot of things R2-D2 and C-3PO can do instantly and 10,000 times better than Luke, Leia, or Han, but there’s also a lot of things you wouldn’t want to rely on them to do. Now, if we could just pop a restraining bolt on AI...”

What’s interesting to me is that George Lucas’s Star Wars is set “a long time ago, in a galaxy far, far away,” but it’s starting to look far more like it was a glimpse 100 years into the future (we’re about halfway there now). C3PO’s instant translation skills, R2-D2’s ability to interface with other systems and instantly hack them if needed, the Millennium Falcon’s computer being able to outperform other navigation systems (the L3-37 storyline), and even some droid-hate.

In the Star Wars universe you get everything from armies of mindless droids to medical and other specialized droids to rogue droids doing their own thing to droids programmed for less than ethical purposes, and even human-robot mashups like Lobot.

If you’re not a Star Wars nerd, Lobot is part of Lando Calrissian’s entourage in Cloud City, the guy with the Neuralink cybernetic implant wrapped around the back of his head.

In the larger canon, Lobot directly interfaces him with Cloud City’s central computer, giving him access and allowing him to perform tasks with mere thoughts. We’re obviously not there yet, but it’s also not a 1977 sci-fi fantasy anymore.

The good news is that the Rebels and Empire still had to lean on human pilots.

The Bulletin Board

• THE LEDE: Kalshi study shows well calibrated markets, but there’s always a but…

• ROUNDUP: A look at the stories you may have missed.

• AROUND the WATERCOOLER: Two of Kalshi’s four legal problems.

• STRAY THOUGHTS: More on AI efficiency.

Share

Sponsor’s Message: Play’n GO is launching into land-based casinos.

After more than 20 years at the forefront of iGaming, Play’n GO is bringing its world-famous games to land-based spaces, too.

Play’n GO’s unrivalled portfolio of some of the world’s most played online casino games is now available for physical casinos, giving operators the opportunity to harness the power and growth of online casino to bring a new demographic of players into their brick and mortar spaces for the very first time.

With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

The Lede: Kalshi Releases Study on Market Accuracy

Kalshi recently released an internal study on some 2 million markets, which it called (via email) the “largest-ever study of prediction-market accuracy… to test a simple question: do predictions-market probabilities actually predict what happens?”

Per the study, “Events trading at 70% happen roughly 70% of the time, while events at 20% happen about one in five times, with predictive value holding even in lower-volume markets and for events months away.”

Kalshi CEO Tarek Mansour posted about the study on X, with the tweet receiving tons of engagement:

This is one of the more balanced takes on the data, as it notes that near-term predictions are more accurate:

Other responses were more critical, calling into question the sample selection:

The removal of the more volatile markets (like sports) makes the data less noisy and focuses on longer-term markets, but it also makes the remaining sample less representative of Kalshi’s accuracy.

Several observers also pointed out there is a small, but non-trivial “yes” bias.

Criticisms aside, the study does indicate a strong signal-to-noise ratio at prediction markets.

On the flip side, a recent study by Morgan Stanley throws some lukewarm water on the “wisdom of crowds.” The study, released on August 5, 2026 and titled, The Wisdom of Crowds in Markets: Crowd Behavior in Prediction, Betting, and Stock Markets, was authored by Michael J. Mauboussin and Dan Callahan, CFA at Counterpoint Global.

As reported by Compliance+More, “Morgan Stanley’s Counterpoint Global team [found that] collective intelligence depends on three conditions: diversity of thinking, an effective method of aggregating information and incentives that reward participants for being right.”

The study found that price manipulation can temporarily push a contract higher or lower. However, it’s rarely durable (particularly in liquid markets), as other traders can spot the inefficiency and push the price back toward its true level.

More concerning to the Morgan Stanley team is the risk that the underlying event is compromised, or that traders are acting on insider information. Put simply, the crowd can police bad prices; it cannot necessarily police the external world.

A previous study, Who Wins and Who Loses in Prediction Markets? Evidence from Polymarket, of 600 million Polymarket trades between November 2022 and March 2026 found that profits are concentrated among a small group of skilled or informed traders — 69% of users from a pool of 2.4 million lost money, with the top 1% capturing 77% of gains and the top 10% accounting for 96% of gains.

Taken together, the evidence suggests prediction markets are as accurate as, if not more accurate than polling and individual experts. But (there’s always a but), the “wisdom of the crowd” is not evenly distributed. Prices tend to be efficient and self-correcting against price manipulation, but they don’t sniff out insider edges.

SPONSOR’S MESSAGE - Underdog: the most innovative company in sports gaming.

At Underdog we use our own tech stack to create the industry’s most popular games, designing products specifically for the American sports fan.

Join us as we build the future of sports gaming.

Visit: https://underdogfantasy.com/careers

Roundup: So Much News; So Little Newsletter Space

DFS sites prevail in Kentucky gambling loss recovery lawsuit [Bloomberg Law]: “The companies behind Underdog Fantasy and two other gaming platforms convinced a federal district court to dismiss a lawsuit alleging they should be held liable for gambling losses under Kentucky’s Loss Recovery Act. Kentucky Gambling Recovery LLC lacks standing to claim that the defendants run illegal sports betting operations within the state, the US District Court for the Eastern District of Kentucky said Tuesday, dismissing KGR’s case with prejudice.”

Cantor jumps into the prediction market space [Press Release]: Cantor Fitzgerald & Co. has “announced the launch of institutional trading for prediction markets, becoming one of the first full-service investment banks to provide institutional clients with access to block trading in event contracts on a CFTC-regulated exchange. Cantor will act as an Introducing Broker, arranging and facilitating the execution of institutional-size block trades in event contracts for institutional clients, enabling them to negotiate block trades in event contracts at a single price through Kalshi’s block trading framework, away from the central order book. Cantor is also collaborating with Susquehanna Predictions, part of the Susquehanna International Group of Companies, a leading liquidity provider in prediction markets, to provide institutional-scale pricing and liquidity for its prediction markets coverage.”

Kalshi blocks users in Washington State [Sports Betting Dime]: “Kalshi has started the process of prohibiting certain event contracts in Washington following a King County Superior Court order. The prediction market operator began notifying Washington users this week that certain markets were blocked in the state. Kalshi has started to prohibit sports, elections, politics, entertainment, culture, tech and science, and mentions event contracts in Washington.” This is the third state Kalshi has been forced to block following adverse court rulings; Nevada and Michigan are the others.

Kalshi fires back in New Mexico, says ‘CEA preempts IGRA’ [InGame]: “Leaning into the argument that the Commodity Exchange Act (CEA) supersedes the Indian Gaming Regulatory Act and preempts tribal ordinances and regulations, Kalshi submitted a court response Wednesday asserting its right to continue operating on tribal land in New Mexico.”

Encore Boston Harbor Employees vote to strike [Boston Herald]: “Roughly 1,350 members of UNITE HERE Local 26 and Teamsters Local 25 voted Thursday night to authorize a strike at the Everett casino. “We’re not asking for anything unreasonable; we’re asking to be respected and fairly compensated for the work we do,” said Sem Avdic, a warehouse worker and member of Teamsters Local 25. “That’s why we voted the way we did. Nobody wants to strike. But nobody is going to keep making Wynn rich while our own families fall behind.”

Tweet of the Week:

Read of the Week:

City Journal Substack

The Coming Supreme Court Battle Over Prediction Markets

In the last few years, prediction markets have exploded. From September 2025 to April 2026, monthly global trading volumes on Kalshi and Polymarket—the two largest prediction-market platforms—went from around $5 billion to $24 billion. Weekly trading volume on Kalshi…

Read more

11 days ago · 11 likes · 1 comment · C. Jarrett Dieterle

Around the Watercooler

Social media conversations, rumors, and gossip.

Setting aside the core fights over preemption and what the CEA means by gaming, prediction markets have four looming legal issues. Today I’ll look at two of those issues, the first being: What happens when prediction markets abide by a state law:

The Nevada filing reads in part:

“Kalshi’s embrace of S.B. 257 undermines its arguments at every turn. On field preemption, Kalshi argued that the CEA creates a “regime [that] leaves no room for the States to supplement it… Kalshi attempts to draw a distinction between regulating its contracts and taxing them… but that is purely a formalism—both are forms of regulation by the State.”

“On conflict preemption, Kalshi argued that the application of Nevada’s gaming laws would frustrate a supposed federal policy of uniform regulation of derivative markets… Yet S.B. 257 imposes exactly that type of State-specific regulation, by requiring Kalshi to identify its gaming activity attributable to North Carolina and pay taxes on that activity.

“By embracing S.B. 257, Kalshi is admitting that a State has the power to regulate its operations in the State—a stunning about-face, which would mean that (at a minimum) Kalshi cannot evade Nevada’s taxing provisions.”

This is something I noted soon after the bill was passed (the Catch-22 Kalshi finds itself in if it abides by the North Carolina law):

“A bill signed into law in North Carolina (SB 257), explicitly allows CFTC-registered prediction market operators to operate lawfully in the state without any additional state licensing, registration, or regulatory requirements, provided they comply with the federal Commodity Exchange Act. It also imposes a 6% tax on prediction markets “net trading fee.”

“That said, if prediction markets abide by these laws, they would undercut their legal argument that the Commodity Futures Trading Commission (CFTC) is the sole regulator of prediction markets.”

The second legal issue Kalshi is running into is that its longstanding argument that not offering its products in a state would violate the CFTC’s impartial access mandate that requires nationwide uniformity hasn’t aged well.

Although, that argument went out the window when other prediction market operators limited where they offered sports contracts. As I noted way back in November 2025:

“Quick Thought #7: FanDuel and DraftKings will geofence states and tribal lands, which severely undercuts two of Kalshi’s core arguments: 1) that geofencing conflicts with CFTC impartial-access rules requiring nationwide uniformity, and 2) geolocation is expensive and logistically challenging.”

But it’s clearly dead now, as Kalshi has been forced to geofence three states, Nevada, Michigan, and Washington, not to mention a Utah judge ruled that the impartial-access requirement targets financial discrimination, not geography.

And as an aside, I think Attorney Andrew Kim (a two-time STTP podcast guest (#48 and #66) nailed this one, as the CFTC has leaned into the former, although, as I’ve recently noted, it seems to be shifting to the latter:

Attorney Andrew Kim told InGame, how the CFTC gets involved will matter: “If the CFTC says, ‘we think the [Commodity Exchange Act] CEA preempts state gaming laws’ and it repeats the arguments raised by the prediction markets, I’m not sure judges will give that much additional weight/consideration. If, however, the CFTC says, ‘here’s how we regulate prediction markets, and here’s how co-regulation of prediction markets by the states might interfere with our ability to oversee them,’ I could see a few judges giving that analysis serious weight.”

Stray Thoughts

A specific line from Gary Marcus in the YouTube video below really caught my attention (paraphrasing): AI is very good at tasks; it’s not very good at jobs. It can make people more efficient at their jobs.

Straight to the Point has put each state into one of four categories:

1. Contenders

2. Dark Horses

3. Longshots

4. Black Swans

These rankings are fluid. A single election, budget deficit, scandal, or change of heart from an online opponent could change any state’s position overnight.

Read more

The taxable amount represented a 9.1% increase from a year ago, while the $311.9 million in pre-deduction operator winnings was up 12.3%. July marked the 10^th consecutive month gross revenue surpassed $300 million, while AGR ranked sixth all-time dating back to the state’s July 2019 launch.

State tax receipts from iGaming totaled $74.7 million for the month, lifting the year-to-date total to $518.1 million. The $1.74 billion AGR for the first seven months of 2026 is running 11.5% ahead of last year’s pace.

Read more

It was the fifth consecutive month gross revenue topped $300 million, with July winnings up 20.9% from 2025. The total ranked fifth all-time in Wolverine State history, edging past the $301.2 million reported for June.

Read more

Sponsor’s Message: Play’n GO is launching into land-based casinos.

After more than 20 years at the forefront of iGaming, Play’n GO is bringing its world-famous games to land-based spaces, too.

Play’n GO’s unrivalled portfolio of some of the world’s most played online casino games is now available for physical casinos, giving operators the opportunity to harness the power and growth of online casino to bring a new demographic of players into their brick and mortar spaces for the very first time.

With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

In this episode of Straight to the Point Talking Shop Podcast, I welcomed investigative journalist and author of Vegas Concierge, Brian Joseph, to unpack his recent five-part series for Casino Reports, dubbed, “Compliance Confidential.”

Joseph, a longtime reporter based in Las Vegas, explains how his background covering tight-lipped political communities prepared him for deep gaming reporting.

The series digs into the ongoing anti-money-laundering (AML) scandal involving Las Vegas Strip casinos, with Joseph explaining the nearly year-long process that included covering every facet of the cases, from the complaints to the federal prosecutions to the Nevada Gaming Control Board actions to the culture of secrecy that surrounds the industry.

We also explored the tension at the heart of the AML issues: casinos’ dual role as compliance-focused businesses and publicly traded companies driven by growth.

We also discussed California’s tribal gaming and card-room politics (and politics in general), the persistence of black-market sports betting (driven by credit, anonymity, and convenience), industry consolidation and the “McDonaldization” of the Strip, and the rarity of investigative work in today’s media landscape.

• You can purchase his book on sex trafficking in Las Vegas, at VegasConciergeBook.com

• Or reach out to Brian at @bjoseph1 on Twitter or on LinkedIn.

The Bulletin Board

• THE LEDE: Crypto, AI, and prediction market leaders were in Washington DC.

• THE READING LIST: A look at the articles Straight to the Point is reading.

• NEWSLETTER ROUNDUP: The best of the best in gambling newsletters.

Share

Sponsor’s Message: Play’n GO is launching into land-based casinos.

After more than 20 years at the forefront of iGaming, Play’n GO is bringing its world-famous games to land-based spaces, too.

Play’n GO’s unrivalled portfolio of some of the world’s most played online casino games is now available for physical casinos, giving operators the opportunity to harness the power and growth of online casino to bring a new demographic of players into their brick and mortar spaces for the very first time.

With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

The Lede: White House Talks Crypto; CFTC Talks PMs

It was a busy week in the nation’s capitol. Crypto leaders met with the White House on Wednesday, while crypto, finance, and prediction-market bigwigs gathered for the the Commodity Futures Trading Commission’s (CFTC) inaugural get-together of its Innovation Advisory Committee — which I previously noted, has a roster that is very tilted in favor of prediction markets.

Before diving into the Innovation Advisory Committee (which focused heavily on prediction markets), let me quickly recap the news that came out of the White House’s meeting with crypto leaders, as there has been a push to include prediction markets in the stalled CLARITY Act.

The meeting resulted in President Trump urging Congress to pass a “fair version” of the now-stalled CLARITY Act under a unified SEC/CFTC framework for digital assets. Prediction market leaders were either not invited or disinvited to focus the meeting on crypto, but CFTC Chair Michael Selig was present and previewed the next day’s Innovation Advisory Committee meeting and brought up protecting CFTC-regulated prediction markets from state lawsuits.

The CFTC’s Innovation Advisory Committee

The three-hour IAC meeting (livestream here) covered a lot of ground, including crypto and AI, but the main course was prediction markets.

On Crypto, Selig said if the CLARITY Act remains in a holding pattern, the CFTC will use existing authorities to establish rules for crypto markets, including creating a “crypto asset market” designation (similar to DCMs) that could allow both registered and non-registered crypto exchanges to offer leveraged or margined trading under CFTC oversight.

The AI discussion was rather broad, touching on everything from applications in trading, surveillance and compliance to agentic finance (autonomous agents).

The meat of the discussion was prediction markets, with Selig reaffirming the CFTC’s exclusive jurisdiction, the need for regulatory clarity to bolster innovation, investment, and keep activity onshore, and the need to protect prediction markets from what he termed “rogue state attorneys general.”

This tweet pretty much sums up the meeting:

And here are a few odds and ends takeaways:

• DraftKings CEO Jason Robins urged everyone to stop taking shots at each other’s business models, saying it only sowed division.

• FanDuel’s Christian Genetski stressed that the most important thing right now is building consumer trust through clear rules and a level playing field.

• Polymarket’s Shayne Coplan publicly gave Kalshi credit for fighting the early legal battles that benefited the whole sector.

CME and Kalshi Clash

It was a verbal sparring match between Kalshi Co-Founder Luana Lopes Lara and CME’s Chairman and outgoing CEO Terry Duffy that stole the show. Duffy raised concerns about market manipulation risks and criticized self-certification practices.

Lopes Lara responded by asking Duffy the most loaded of loaded questions: “Has CME ever had any issues with any market manipulation, any issues ever in its history?”

And then the fireworks ensued:

Duffy: “I have more people in my regulatory department than you and your entire company.”

Lopes Lara: “Maybe you should learn a bit about efficiency then.”

Duffy: “Maybe you should learn about credible markets.”

Midway through the exchange, Selig interrupted, saying that the cited examples, which included President Trump’s teleprompter operator and George Santos, occurred offshore and calling the characterization “fake news,” which it most certainly isn’t:

Also needing a fact check was this statement by Lopes Lara:

STTP Thoughts: Taken together, the two events seem to indicate that if Congress continues to sit on its hands, there will be executive and agency efforts to deliver on crypto.

And as I said earlier this week, when it comes to prediction markets, it feels like the CFTC is trying to guide prediction markets down a more palatable path, with clear rules and guardrails, for the seemingly inevitable Supreme Court date.

A Glimpse at some of what you get with a Forecast Tier subscription

The Reading List: Suggested Reading from STTP

• Election Officials Are Preparing for Prediction Markets to Sow Chaos in the Midterms [Wired]

• Morals in gambling journalism and why they matter [iGaming Business]

• Underdog Sued By Aristotle Inc. On Heels Of IG Group Sale [InGame]

• Bally’s Warns Of ‘Substantial Doubt’ In Ability To Stay Afloat [Casino Reports]

• Terry Duffy on why CME is opting out of sports prediction markets [Crain’s Chicago Business]

• Novig Already Fourth-Largest Regulated Prediction Market In U.S. After Strong Start [InGame]

• Kalshi Launches First Full Geofence, But It Only Works After Optional App Update [InGame]

• California 2028: Tribes Will Ask Voters To ‘Trust Us’ — And They Will [InGame]

• Caesars proxy filing details months-long bidding war between Icahn, Fertitta [iGaming Business]

• Maryland’s iGaming supporters need a fact check [Baltimore Sun]

Newsletter Roundup: Best of the Week in Substack Land

Earnings+More

The $850m bridge with a new toll gate

Uncertain emotions: IG’s proposed acquisition of Underdog has accrued an additional legal wrinkle after Aristotle challenged what it is owed from selling its regulated exchange and clearinghouse to U…

Read more

13 days ago · 7 likes · Earnings+More

The Closing Line

A Tradition Unlike Any Other: Betting On The Little League World Series Offshore

G2E is where the global gaming industry comes together to navigate what’s next—delivering an all-in-one experience designed to move business forward. With actionable insights, high-value connections…

Read more

14 days ago · 7 likes · Dustin Gouker and Eric Ramsey

Legalytics

Prediction Markets’ Next Big Bet Is in the Appeals Courts

On April 24, the legal fight over prediction markets entered a new phase. The Commodity Futures Trading Commission sued New York in federal court to stop the state from applying its gambling laws to federally regulated prediction markets. The same day, the agency filed a brief in Massachusetts’ highest court asserting that event-contract markets fall within its exclusive jurisdiction…

Read more

14 days ago · 11 likes · Adam Feldman

Gaming News Canada

What GBG Plc's early market data reveals about Alberta iGaming

Watch a video of this podcast or listen on your preferred podcast app…

Listen now

14 days ago · 2 likes · Steve McAllister

The Event Horizon

Episode 28: Prediction Market Policy With Aaron Klein Of The Brookings Institution

The Brookings Institution’s Aaron Klein stopped by to talk about all things prediction markets (starts at the 47-minute mark). He is a senior fellow at Brookings’ Center on Regulation and Markets and worked on the Dodd-Frank Act…

Listen now

15 days ago · 4 likes · Dustin Gouker

The Overlay

Saturday Showdown: WSOP Main Event Final Table Ratings Are In

Welcome to the Saturday Showdown, a collection of the best articles, videos, podcasts, and social media content from this week. Reading this should keep you up-to-date on the poker world while you en…

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17 days ago · 3 likes · Lance Bradley

The Bulletin Board

• THE LEDE: What Gallup’s new gambling poll can, and can’t, tell us.

• BEYOND the HEADLINE: Where gambling polling has been consistent.

• ROUNDUP: A look at the stories you may have missed.

• VIEWS: The prediction market trap. Or, what happens when liquidity dries up.

• AROUND the WATERCOOLER: Florida AG sues Stake and VGW.

• STRAY THOUGHTS: Baseball’s Bible.

Share

Sponsor’s Message: Play’n GO is launching into land-based casinos.

After more than 20 years at the forefront of iGaming, Play’n GO is bringing its world-famous games to land-based spaces, too.

Play’n GO’s unrivalled portfolio of some of the world’s most played online casino games is now available for physical casinos, giving operators the opportunity to harness the power and growth of online casino to bring a new demographic of players into their brick and mortar spaces for the very first time.

With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

The Lede: About That Gallup Poll on Gambling…

The headline takeaway from a new Gallup poll is that Americans are gambling far less in 2026 than they were in 2016: “Americans are significantly less likely than they were 10 years ago to say they participate in a variety of gambling activities,” Gallup said. And the poll results, however counterintuitive they seem, bear that out.

But once you get past the headline, the numbers actually start to align with other polling.

Buried further down the article on the Gallup site is this:

“The historical and current Gallup data are based on telephone interviews conducted by live interviewers. However, Gallup conducted a parallel web survey in June that asked the same gambling questions using the Gallup Panel, an online probability sample.

“In that web survey, the percentages of U.S. adults who indicate they participate in each of the 13 different forms of gambling are slightly higher. As a result, the estimate of those who gambled in any form last year — 53% — is also higher than in the telephone survey.”

The online polling numbers are far closer to what we expect to see, with nearly 10% of respondents placing a sports bet, 7% gambling online, and 4% using prediction markets. Keep in mind that there are several sports betting categories in the Gallup poll: Sports bets, college sports, office pools, boxing, and fantasy sports.

I often criticize how questions are phrased in polls. Just as important is who gets surveyed. What the Gallup numbers really show is that people who answer phone surveys are less likely to gamble than people who take online surveys. And my educated guess is that people who don’t take surveys are even more likely to be gambling.

Still, let’s not write off this poll as a nothingburger.

We are often told that we need to protect people from the scourge of gambling, but here’s the thing, humans also adjust, and after getting beaten over the head with gambling expansions for the better part of 30 years, people might be getting sick of it. At least among certain cohorts.

As I said in a soon-to-be-released podcast with investigative journalist Brian Joseph (Brian just published an impressive five-part series on compliance failures), pre-Internet, people aged into gambling, and what we might be seeing here is people aging out of gambling, considering the people who grew up during the Poker Boom are now in their 40s and 50s.

Also, we need to stop pretending everyone is a gambler or a gambler-in-waiting, who is one advertisement away from downloading a sports betting app and going ham. Outside of the Super Bowl and March Madness, sports betting isn’t exactly a popular activity. Yes, when asked if they’ve bet in the last year, a lot of hands will go up, but as I’ve said in the past, betting on the Super Bowl, or placing a $20 bet every week or two, doesn’t make you a sports bettor.

Beyond the Headline: Gambling’s Perception Problem

In June, Gallup surveyed Americans on the moral acceptability of different activities, and as has been the case with numerous other polls, including polling from Pew (screenshot below), Gallup found the perception of gambling is waning:

Roundup: So Much News; So Little Newsletter Space

FanDuel and GeoComply renew agreement for ID, fraud, and geolocation services [Press Release]: “FanDuel Group and GeoComply announced a multi-year renewal that will see “FanDuel will continue to leverage GeoComply’s industry-leading identity verification and fraud prevention technology to help protect customers and maintain the integrity of its platform… GeoComply will also commit dedicated forward-deployed engineers directly to FanDuel’s product and operations teams, deepening the use of location & device intelligence, behavioral signals and real-time fraud detection.”

NCLGS Winter Meeting is coming to Savannah, GA [Release]: “Registration is open for the Winter Meeting of the National Council of Legislators from Gaming States, which will be held December 9-12, 2026, at the JW Marriott Savannah Plant Riverside District.” Why go to NCLGS? From the release: “Legislators, regulators and gaming industry leaders will gather for four days of timely gaming insights, critical policy discussions, legislator panels, networking and the unique NCLGS experience. NCLGS meetings are the only conferences where state lawmakers from across the country regularly come together to discuss issues shaping the gaming industry.”

New study looks at long-term impacts of New Orleans smoking ban [Study]: “A new study examining the long-term impacts of New Orleans’s landmark smokefree law has confirmed that eliminating indoor smoking from the city — including in bars and casinos — has led to a dramatic decline in smoking-related deaths and lung cancer rates.” Cynthia Hallett, president and CEO of Americans for Nonsmokers’ Rights (and a former Straight to the Point podcast guest): “LSU’s study confirms what we have seen on the ground for over a decade. When cities take action to eliminate indoor smoking, public health dramatically improves, and businesses continue to prosper. New Orleans’s success as a smokefree city over the past 11 years refutes the tired industry scare tactics about what happens when casinos go smokefree.”

Evoke shareholders approve Bally’s Intralot takeover [Next.io]: “The £243m [$329m] deal for Bally’s Intralot to take over Evoke has moved closer to completion after the target’s shareholders voted convincingly in favor… Robeson Reeves, CEO of Bally’s Intralot, has maintained that he has no intention of immediately selling off any Evoke assets following the deal’s completion, which has been expected to complete in Q4 2026 or Q1 2027.”

Another legal threat for prediction markets [Bloomberg Law]: In addition to battling in state and federal court with states, “Consumers have filed more than a dozen class action lawsuits against Polymarket and Kalshi — the two biggest players in prediction markets — as well as Robinhood and DraftKings, claiming that they violate state consumer protection laws by offering a form of sports betting disguised to skirt safety regulations and licensing regimes. The lawsuits against Kalshi and Robinhood have been consolidated in the Southern District of New York and Northern District of California, respectively.”

Massachusetts regulators reapprove table tennis markets [Sports Betting Dime]: “The Massachusetts Gaming Commission (MGC) unanimously approved a DraftKings event petition to allow sports betting on TT Elite Series table tennis events, which had been removed from the regulated Massachusetts sports betting catalogue earlier this year. The Sports Wagering Division of the Massachusetts Gaming Commission conducted a review of TT Elite Series and determined the organization strengthened its integrity controls and showed improved integrity performance for its markets.” STTP Thoughts: I just don’t see the need for Americans to bet on international ping pong matches.

Underdog adds pitch-by-pitch Crash Games [Underdog]: Underdog (a newsletter sponsor) has launched a new offering, Crash. “Crash is a live, pitch-by-pitch fantasy sports contest available during MLB games. You're projecting how many pitches a batter's plate appearance will last against the opposing team's pitcher — and deciding when to cash out before the at-bat ends.”

After ceasing gambling operations, Bodog is now a media brand [Next.io]: “Bodog has relaunched as an independent media platform, marking a sharp departure from the gambling operations that built its name. The company stopped operating as a casino and sportsbook this past February. Its new website instead focuses on editorial content, research and commentary across several consumer sectors. Bodog will continue to focus on the gambling sector but also plans coverage spanning sports culture, technology, travel and wellness. It is also positioning responsible gambling education and research within its editorial operation.”

EGR parent company acquires H2 Gambling Capital [Press Release]: “Burghclere, a family office that invests in Data and Analytics businesses, has acquired H2 Gambling Capital… the betting and gaming sector’s most trusted market intelligence provider with market sizing and forecasting models spanning over 150 national and state gambling markets and more than 100 listed operators and suppliers… Burghclere also owns EGR Global, the leading B2B news and events business for the gaming sector, and the transaction will bring the two businesses into one portfolio to create the leading data intelligence platform to serve the gambling industry.”

Tweet of the Week:

STTP Thoughts: I’ve been ignoring this story because, well, I wrote extensively about it last year:

Quote of the Week: “Unsurprisingly, FanDuel is using the broken ‘responsible gaming model’ to shield themselves from any possible wrongdoing and place the blame entirely on the consumer. FanDuel and other sportsbooks have proven themselves to be incapable and unwilling to protect their customers from this dangerous, addictive product.” ~ Rep. Paul Tonko on FanDuel’s response to questions about its VIP practices (covered here).

Views: What Happens When Liquidity Dries Up?

This is something I’ve written about several times in the newsletter:

As I said in December 2025:

“The problem P2P gambling has always had is that the sharks don’t care about the ecosystem’s health; that’s the operator’s problem. They’re not into sustainable fishing. They’ll fish until there’s nothing left, leaving the pond empty and the operator scrambling to restock it (at massive costs).”

And in May 2026 I said, “that’s where everything falls apart, because skill-level is relative and churn is real”:

“Unfortunately, in the real world you don’t get a slow bleeding of your customers, you get a shrinking ecosystem where a very small percentage of your customers are feeding on your other customers… Once all the losers are chewed up and spit out, they become the prey.

“That isn’t a problem when the industry is in a period of rapid growth (prediction markets are in their Poker Boom phase), but when that growth slows, and losing customers grow frustrated and move on to the next thing, it becomes a very serious problem, very fast.”

And as I wrote in an article on limit vs. no limit poker:

“The bottom line is this: Prediction markets are still in their Poker Boom phase, with plenty of new fish being added. The concern is: What happens when the fresh supply of fish stops? History tells us that once the low-hanging fruit is picked, things start going sideways, which is why the next 12 months will be good times for all, but after that we’ll find out if these platforms can actually build a sustainable business.”

Or, if you want to hear a perspective other than mine, Jason Robins talked about during DraftKings’ Q1 earnings call:

“When you have a peer-to-peer setup, you’re going to have people on one side that are experts, and you’ve got to make sure you protect the ecosystem as best as you can, within the rules and regulations.

“Doing things to make sure that you’re building a healthy ecosystem was critical to us building out a sustainable daily fantasy sports product. Right now, I don’t see that necessarily happening with some of our predictions competitors.”

Around the Watercooler

Social media conversations, rumors, and gossip.

Florida Attorney General James Uthmeier is suing sweepstakes operators Stake and VGW — Full press release here:

“Attorney General James Uthmeier announced the filing of two lawsuits against the operators of major online “sweepstakes” casinos—including Stake and VGW’s Chumba Casino, LuckyLand, and Global Poker—and the payment processors that enable them. The complaints, filed in Hillsborough County Circuit Court today, allege the defendants are operating illegal online gambling enterprises that violate Florida’s gambling laws and the Florida Deceptive and Unfair Trade Practices Act.”

An interesting aspect of the lawsuits is, as attorney Daniel Wallach noted, the targeting of payment processors:

To say VGW is reeling is an understatement. The company was a sweepstakes juggernaut just a couple of years ago, but oh how the mighty have fallen. Setting aside the numerous US state crackdowns and class action lawsuits:

• VGW exited Canada in August 2025.

• Earlier this year, VGW founder Laurence Escalante stepped down as chief executive (and formally resigned in July) after being charged with family violence and drug offences over an alleged assault.

• VGW announced LuckyLand Slots is exiting the US in September.

Stray Thoughts

Today’s headline was said by my father, and it’s one I’ve heard second-hand several times.

Many years ago, in the days before the Internet, he was arguing with the local sports reporter for the town (remember when newspapers had those) about some random baseball statistic.

The argument went on for about 30 minutes, got heated, and the reporter, Richie, left, drove home, and returned with The Baseball Encyclopedia, known as “The Bible.” He showed my father the statistic in question, which led to my father's infamous and oft-quoted (at least in our family) emphatic response of: “The book is wrong!” which he believed settled the debate.

The Bulletin Board

• THE LEDE: The CFTC is trying to set up guardrails for prediction markets.

• ALTRUDA ANALYZES: A 2026 first, AC casinos best online counterparts.

• NEWS: Prediction Markets will not be part of today’s White House tech meeting.

• AROUND the WATERCOOLER: State regulators are under fire.

• STRAY THOUGHTS: Don’t play Games on game night, watch Game Night.

Share

Sponsor’s Message: Play’n GO is launching into land-based casinos.

After more than 20 years at the forefront of iGaming, Play’n GO is bringing its world-famous games to land-based spaces, too.

Play’n GO’s unrivalled portfolio of some of the world’s most played online casino games is now available for physical casinos, giving operators the opportunity to harness the power and growth of online casino to bring a new demographic of players into their brick and mortar spaces for the very first time.

With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

The Lede: Can the CFTC Keep PMs Inside the Guardrails?

In a Stray Thought last week I wrote, “I think we’re entering the put up or shut up phase of the prediction market debate.”

What I meant was: The recent spate of court losses seems to have unnerved Kalshi, which doesn’t seem overly confident arguing its self-certify, self-regulate, the CFTC is the be-all end-all case anymore, and is instead (with some guidance issued by the CFTC) cleaning up its act, at least around the edges.

The seeming coordination between the CFTC and Kalshi is hard to miss.

The CFTC has issued several advisories that seem to be aimed at helping prediction markets paint themselves in the best possible light when they have their date at the Supreme Court:

Per NPR, the CFTC has launched a review of easily manipulable mention markets:

“Federal regulators have launched a review of so-called “mention markets” on prediction market sites, where bettors wager millions of dollars on the word choice of everyone from President Trump to soccer sportscasters, according to two people with direct knowledge of the probe who spoke to NPR on the condition of anonymity because they were not authorized to speak publicly.

In response, Kalshi, the largest prediction market in the US, has removed all mention markets from its betting offerings for sports as the Commodity Futures Trading Commission pursues its inquiry, according to one of the people.”

And as NPR noted, a core CFTC rule is that markets are not “readily susceptible to manipulation”: “There is growing concern among Kalshi’s lawyers and federal regulators that betting on certain kinds of speaking events runs against this principle, since the very nature of some markets attracts possible manipulators.”

More from Dustin Gouker:

The Event Horizon

Sports Mention Markets Are Gone At Kalshi For Now, But Will They Return?

Mention markets are one of the biggest categories at Kalshi outside of sports, parlays and crypto. But Kalshi has sidelined mention markets related to sports events ahead of football season…

Read more

18 days ago · 12 likes · Dustin Gouker

The CFTC also issued an advisory about selective or randomized rewards and against promising “risk-free” incentives, unlimited payouts, or promotions that could guarantee profits or offset losses. “DCMs are encouraged to consider whether certain categories of incentive programs incentivize impermissible trading behaviors, render listed contracts more susceptible to manipulation, or contribute to market distortion,” the advisory says.

Per the press release:

“Such deficiencies can impede staff’s ability to evaluate whether DCMs have provided adequate notice of program terms and have sufficiently assessed compliance with core principles and other Commission requirements.”

As Indian Gaming Association Chairman David Bean said during a recent IGA New Normal webinar: “Chairman Selig of the CFTC is coaching this industry to prep them for the Supreme Court. In the history of the United States, when have you seen a regulatory agency advocating for the people that they’re supposed to regulate?”

Or, as Benjamin Schiffrin, Director of Securities Policy for Better Markets, put it:

“This is not the first time the CFTC has directed Kalshi to violate a court order. It did so after a Michigan state court ordered Kalshi to void, cancel, and refund some bets. The CFTC is now directing Kalshi to violate the orders of a federal court. Its cheerleading for prediction markets truly knows no bounds. The harm this causes is no longer limited to the derivatives markets the CFTC is supposed to oversee or the consumers state gambling laws are supposed to protect but now extends to the rule of law that the CFTC disregards itself.”

The appearance of close coordination between the CFTC and prediction markets is even harder to ignore when it comes to the emergency orders it has issued, the first two since 1980! (And regular readers know how sparingly I use exclamation points).

As John Lothian (whose newsletter has been covering the derivatives and securities markets for more than 25 years) recently wrote on the emergency orders:

“The CFTC has exercised that authority six times since its creation: four times between 1976 and 1980 and twice during the past 30 days… The commission allowed its emergency power to remain dormant for 46 years before Chairman Michael Selig revived it twice, both times in support of Kalshi.

“Section 8a(9) is the CFTC’s nuclear option. It allows the commission, upon finding an emergency, to direct a registered exchange to take whatever action the agency considers necessary to maintain or restore orderly trading. The merits of that emergency determination are generally insulated from judicial review.”

And as NPR’s Bobby Allyn put it, it’s hard to wrap your head around the idea that sports betting (and this is largely about preserving sports contracts) requires a nuclear response:

While attorney Daniel Wallach thinks the orders may be strategic:

This will be the topic du jour on today’s Indian Gaming Association New Normal Webinar series (1 PM EST, today) hosted by Jason Giles, Executive Director of the Indian Gaming Association, and Victor Rocha, Conference Chairman of the Indian Gaming Association. Their guest will be Amanda Fisher, Policy Director and COO of Better Markets. Register here.

Altruda Analyzes: AC Casinos Best Online Counterparts in July

The New Jersey Division of Gaming Enforcement reported a record $276.9 million in internet casino revenue for July on Friday, maintaining its year-long streak of double-digit, year-over-year percentage improvements.

The figure edged past May’s previous high of $276.3 million and was 12% higher than the $247.3 million accrued by operators last year. It was the fifth time overall revenue has surpassed $270 million, all coming in the last eight months.

Despite the record haul, Atlantic City brick-and-mortar casinos shined brightest in July with $304.2 million and posted their first “W” of the year over internet casino operators.

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News: Prediction Markets WILL NOT Be Part of WH Meeting

As I reported on Monday (h/t to Politico), the White House is hosting tech leaders today, and while they were originally expected to be in attendance, it appears prediction markets have been disinvited:

Read whatever you will into this.

And as a reminder, prediction markets will be front and center on Thursday:

Around the Watercooler

Social media conversations, rumors, and gossip.

Kalshi is taking aim at state lawmakers and regulators, calling them pawns for the casino industry.

First it was Comms Director Jacki McGavick taking shots at New York Gov. Kathy Hochul:

And now there is this from Kalshi’s General Counsel and Chief Regulatory Officer:

I’ve written extensively about growing tensions between licensed gambling operators and regulators, and this, from West Virginia Rep. Shawn Fluharty, is yet another reason it’s a bad idea, as the industry’s complaints (and high-profile no-show) call into question the credibility of regulatory bodies, which prediction markets are looking to further erode at a time when the licensed industry needs them the most:

Stray Thoughts

It’s been a while since I posted about pop culture, but I recently rewatched Game Night with one of my kids, and forgot how funny it was:

The line, “How can that be profitable for Frito Lay?” Kills me.

The Bulletin Board

• THE LEDE: Scandal strikes New Hampshire gambling industry.

• ROUNDUP: A look at the stories you may have missed.

• NEWS: FanDuel responds to questions about its VIP practices.

• AROUND the WATERCOOLER: Is Kalshi headed for a shutdown or an IPO?

• STRAY THOUGHTS: Drawing lines around AI usage.

Share

Sponsor’s Message: Play’n GO is launching into land-based casinos.

After more than 20 years at the forefront of iGaming, Play’n GO is bringing its world-famous games to land-based spaces, too.

Play’n GO’s unrivalled portfolio of some of the world’s most played online casino games is now available for physical casinos, giving operators the opportunity to harness the power and growth of online casino to bring a new demographic of players into their brick and mortar spaces for the very first time.

With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

The Lede: Will Scandal Thwart NH Online Casino Efforts?

Indiana’s online casino efforts were (are still?) derailed by a bribery scandal involving a state lawmaker, and the same situation could hamper efforts in New Hampshire.

Per the Concord Monitor, “A former New Hampshire House speaker and retired lobbyist [George B. Roberts Jr.] took in more than a quarter-million dollars in charitable gaming proceeds over the past seven years for an inactive nonprofit, a month-long Monitor investigation found.”

According to the newspaper, Roberts’ non-profit, Concord Coach Society, has received $274,411 from the system since 2019, including a $131,000 check last year from the Nash Casino, which was the lion’s share of the $166,000 it received in 2025 alone.

Here’s where things get spicy: “Despite its earnings, the Monitor found no evidence that the organization has engaged in any public activity, such as holding an event or a meeting. It has no website or social media footprint. Ten people involved in local and national stagecoach preservation said in interviews that they had no knowledge of any activity by Roberts or his group in more than a decade.”

In addition to Roberts, there is the Andy Sanborn case, where the former lawmaker (and husband to a now former lawmaker Laurie Sanborn) turned casino owner pleaded guilty to Theft of Government Funds. “Sanborn owned and operated Win Win Win, a company that did business as Concord Casino. Sanborn applied for and obtained $844,000 in Economic Injury Disaster Loan funding from the Small Business Administration. In applying for the loans, Sanborn certified that he would use the loan proceeds solely as working capital for Win Win Win. However, Sanborn misused $255,232.72 of the funds on personal expenditures.” Laurie Sanborn (a state lawmaker at the time), will not be charged. Previous STTP coverage of this fiasco.

As I wrote in March 2024:

“Efforts to bring online gambling to Indiana have been derailed by two high-publicity bribery scandals and more “dubious interactions” swirling under the surface.

“‘It [the scandals] taints the Statehouse,’ Senate President Rodric Bray said in November 2023. ‘It diminishes the confidence that people have in the integrity of the Statehouse. It causes an awful lot of problems, and, it makes it particularly difficult to engage in that kind of policy.’

“Former Rep. Sean Eberhart recently pled guilty to conspiracy to commit honest services fraud. Eberhart was accused of pushing for the relocation of two casinos owned by Spectacle Gaming in exchange for a $350,000 post-legislative career job.

“Last year, former Sen. Brent Waltz and former Rep. John Keeler were sentenced to prison for election finance schemes by New Centaur - Spectacle’s original name.

“According to the Indiana Capital Chronicle, ‘There are additional records of other dubious industry-lawmaker interactions, according to a list from the Indianapolis Star.’”

Online casino legalization is never an easy lift, and gambling scandals make it something of a third-rail issue that no lawmaker wants to touch, particularly when it involves someone who lobbied for gambling.

As I said in my 2027-2028 online casino candidate preview for Forecast Tier subscribers:

“New Hampshire is the quintessential “great on paper” candidate, but… Working against the state is the ever-growing — in size and political clout — land-based casino industry, which includes the anti-online-gambling Churchill Downs.”

Now you can add scandals to the list.

Roundup: So Much News; So Little Newsletter Space

Mindway AI and GamScore enter strategic partnership [Press Release]: “GamScore and Mindway AI have announced a strategic partnership aimed at enhancing safer gambling frameworks across the global iGaming sector… The partnership unites GamScore’s independent, bettor-focused platform, which enables players to monitor, understand and demonstrate their betting health, with Mindway AI’s market-leading early detection technology… Looking ahead, both organisations plan to collaborate closely on joint educational resources and integrated workflows.”

Delaware North “standardizes” table games with Light & Wonder [Press Release]: Delaware North (which recently rebranded its gambling operations to Ember Entertainment) has selected Light & Wonder “to replace existing table games technology across multiple casino and gaming properties… Properties included in the agreement are Wheeling Island Hotel-Casino-Racetrack and Mardi Gras Casino & Resort in West Virginia, Gate City Casino in New Hampshire, Southland Casino Hotel in Arkansas, Daytona Beach Racing & Card Club and Orange City Racing and Card Club in Florida, and Catawba Two Kings Casino, a property in North Carolina for which Delaware North serves as the gaming and hospitality consultant and developer.”

GG Poker is the first poker-only operator in Alberta [Geoff Zochodne, X]:

Kalshi appoints Jeff Bandman as CEO of Kalshi Prime [Press Release]: Kalshi has appointed Jeff Bandman as the CEO of Kalshi Prime, Kalshi’s CFTC-registered futures commission merchant (FCM). Per the press release: Bandman is a former senior CFTC official who led the Division of Clearing and Risk and the Office of International Affairs, and “led Kalshi’s regulatory strategy from its earliest days and helped secure its 2020 designation as a CFTC-regulated exchange.”

Kalshi inks deal with Catalist Sports [Press Release]: Catalist Sports and Kalshi have agreed to a “first-of-its-kind multi-year agreement that grants Kalshi exclusive U.S. prediction market access to Catalist Sports’ live streaming portfolio… Kalshi will also receive official low-latency data used to create, manage, and settle prediction markets across a range of leading international tennis events.” Among the sports involved are the World Tennis Tour, Australian Open and Davis Cup, France’s Ligue 1, and Brazil’s Série A.

Fliff is the latest company going the prediction market route [DeFiRate]: “Fliff FCM LLC filed with the National Futures Association (NFA) on Aug. 12 for FCM registration and NFA membership, while also seeking approval as a swap firm. All three applications remain pending. An FCM can serve as the customer-facing intermediary for contracts listed on a Commodity Futures Trading Commission-regulated exchange, meaning Fliff would not need to operate its own Designated Contract Market (DCM) to offer prediction markets.” STTP Thoughts: As I said on Saturday, “Everyone and their brother is getting into the prediction market business… Which brings me to today’s topic: What is the real prediction market opportunity? Assuming prediction markets prevail (a huge assumption) where is the money going to be found?” Maybe Fliff should be selling shovels?

Will a Greenbrier sale alter the online casino landscape in WV? [WV News]: “The Greenbrier will remain open and its casino will continue operating without interruption as the West Virginia Lottery Commission reviews a new ownership structure for the historic resort, officials announced Friday. The announcement came as the Justice Family Group and Kennedy Lewis Investment Management announced the completion of a new joint venture that gives the New York-based private credit and opportunistic asset firm majority ownership and controlling interest in The Greenbrier.” STTP Thoughts: This is something to keep an eye on as online casino licenses in West Virginia are tied to the state’s land-based casinos.

News: FanDuel Responds to Congressional Inquiry

As Straight to the Point reported last week, Sen. Richard Blumenthal, Rep. Paul Tonko, and Rep. Valerie Foushee sent a letter (dated August 10, 2026) to FanDuel CEO Christian Genetski, demanding “FanDuel end the so-called ‘VIP’ services that drive problem gamblers into debt and relapse,” and answer eight questions. FanDuel promptly responded to the letter on August 14, 2026.

Cory Fox, FanDuel’s Senior VP, Public Policy and Sustainability authored the letter (uploaded by Sports Betting Dime here), and began by saying:

“At FanDuel, we take seriously our responsibility to operate in a manner that is accountable, transparent, and worthy of the trust our customers and regulators place in us. This is not mere platitudes. Our parent company, Flutter Entertainment, spent $158M on responsible gaming just last year. FanDuel contributes to problem gambling research and invests in responsible gambling tools on our platform. At FanDuel, we are committed to operating in an accountable and transparent manner because we believe it is core to the sustainability and success of our business over the long run. FanDuel Sportsbook is an entertainment experience that connects our customers to the games they love, and we want our players to enjoy that experience for months and years to come.”

And here are the answers to the direct questions:

Question #1: What measures does FanDuel take to absolutely ensure that bettors are not suffering from financial hardships or a gambling addiction prior to enticing further gambling?

Answer: Before extending a VIP invitation, FanDuel “confirms that the customer’s account is active, in good standing, and free of any suspension, and reviews the customer’s history on the platform. That review includes prior VIP participation and the reason for any prior departure, responsible gaming notes, fraud or chargeback history and promotion abuse.”

Question #2: What steps has FanDuel taken to monitor interactions between managers and VIPs to ensure that managers are not offering predatory offers to problem gamblers?

Answer: “VIP Account Managers receive mandatory training on the VIP program and responsible gaming, including how to recognize the risks and signs of problem gambling. That training continues through quarterly sessions and recurring refreshers… VIP Account Managers receive additional support if customers show signs of problematic play, and FanDuel maintains streamlined escalation channels so that higher-risk behavior identified within the VIP program can be addressed quickly.”
Interactions between VIP customers and Account Managers “also provide FanDuel with additional means to identify signs of problematic play that may not be readily apparent with customers that do not participate in the program.”

Question #3: How many VIP bettors have attempted to cut back their betting activity or close their accounts but were instead offered exclusive perks or offers? How many decided to keep betting after such offers?

Answer: This question went unanswered in Fox’s response.

Question #4: Does FanDuel ever target VIP promotions and perks to bettors who are on a losing streak or appear to be cutting back on wagering?

Answer: The letter does not directly address targeting based on losing streaks or reduced wagering, but Fox did say that the VIP program “operates within the same responsible gaming framework that applies across FanDuel” and that VIP status brings “more oversight, not fewer safeguards.”

Question #5: How many times have VIP managers sent videos from players or other celebrities to a member in order to keep them engaged in gambling on the platform, and were those players made aware of the purpose of those videos?

Answer: This question also went unanswered in Fox’s response.

Question #6: Does FanDuel ever coach or train its VIP managers to develop personal relationships with their clients in order to encourage more gambling?

Answer: “VIP Account Managers receive mandatory training on the VIP program and responsible gaming, including how to recognize the risks and signs of problem gambling.” The letter also notes that managers are “salaried employees. Their compensation is not tied to how much their customers wager or the results of those customers’ wagering activities.” The stated objective of the program is “to provide a positive customer experience so that these customers continue to choose FanDuel instead of our competitors,” not to encourage more gambling via personal relationships.

Question #7: What specific factors does FanDuel consider when identifying “potentially problematic behaviors” and why has this allowed FanDuel to use its VIP program to encourage destructive gambling?

Answer: Fox identified, “Deposit and withdrawal history, increases in wager size, canceled withdrawals, and statements customers make through our in-app chat that suggest distress or a gambling problem.”

Question #8: In light of the clear dangers posed by FanDuel’s VIP program to problem gamblers, will FanDuel suspend or terminate this program?

Answer: “FanDuel’s VIP program is designed to offer a small group of customers a higher level of customer service, not a different set of rules… The program operates within the same responsible gaming framework that applies across FanDuel, with additional training, compliance support, and escalation processes… Together, these measures give VIP customers additional attention and access to responsible gaming resources without changing the standards that apply to their play.”

Around the Watercooler

Social media conversations, rumors, and gossip.

A burning question:

Stray Thoughts

AI arguments, like the one spawned by the tweet below, are very interesting to me.

Of course you will find numerous examples of egregious shortcuts in a large cohort of young adults, under pressure to hand in work, but yes, people can use AI for efficiency, too.

In the grander scheme, I’m still not sure where I stand on AI content. I don’t know where the lines should be drawn, or where my personal boundaries will be in a year, let alone five.

That said, this idea that if you use AI it’s not your words is kind of silly, especially when it comes from people who have editors and fact-checkers or say, ‘use a thesaurus’ as an alternative. Why is a thesaurus okay? Because it takes longer to use?

As one response on X noted, “The reality is that Grammarly and even Microsoft Word spellcheck functions are AI driven. Preferring to use a better model or a model that you can use a custom skill file with isn’t any different.”

Think of it this way: at some point in time there was a lumberjack lamenting chainsaws, a carpenter who refused to use a nail gun, and to this day there are restaurants that refuse to use online ordering or reservations.

There’s a big difference between using something to cheat and using something to make you more efficient. Where that line sits with AI, I just don’t know at this point, so I won’t chastise people who use it more liberally than I do. It’s an individual choice, but don’t be surprised if you find yourself forced to the table, like the Tokugawa Shogunate when Commodore Matthew Perry arrived in Japan.

As former UK Prime Minister Harold Wilson said: “He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery.” Or, put another way (paraphrasing Iain Abernethy), ‘karate is the only activity whose practitioners believe it was perfected a hundred years ago.’

The Bulletin Board

• THE LEDE: Kalshi’s streak of adverse court rulings continues.

• ROUNDUP: A look at the stories you may have missed.

• NEWS: We are losing one of the good ones: Howard Stutz announces retirement.

• AROUND the WATERCOOLER: Coffeezilla returns.

• STRAY THOUGHTS: Working backwards from a goal.

Share

Sponsor’s Message: Play’n GO is launching into land-based casinos.

After more than 20 years at the forefront of iGaming, Play’n GO is bringing its world-famous games to land-based spaces, too.

Play’n GO’s unrivalled portfolio of some of the world’s most played online casino games is now available for physical casinos, giving operators the opportunity to harness the power and growth of online casino to bring a new demographic of players into their brick and mortar spaces for the very first time.

With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

The Lede: More Prediction Market Court Updates

Over the past two weeks, there have been several significant court rulings (and legal developments) involving Kalshi, with the scorecard continuing to tilt toward states.

Utah

On August 4, 2026, US District Judge Robert J. Shelby granted Utah’s motion for summary judgment, holding that the Commodity Exchange Act does not preempt the state’s anti-gambling laws. Kalshi’s preliminary-injunction request was denied as moot and the case was closed at the district level. Kalshi has appealed to the 10th Circuit and filed an emergency motion for an injunction pending appeal.

Connecticut

On August 10, 2026, Judge Vernon D. Oliver denied Kalshi’s preliminary-injunction motion. Oliver’s opinion states that sports-event contracts are not swaps under the CEA and that, even if they were, Connecticut’s sports-betting laws are not preempted. Kalshi sought an emergency injunction pending appeal to prevent state enforcement during the Second Circuit appeal, which was denied on August 15, 2026, by Judge Oliver.

In the August 15 denial, Judge Oliver also took aim at the CFTC’s “emergency order,” (see the New York entry below) writing, “The CFTC Order ignores this Court’s decision, as well as the decision of the Southern District of New York in KalshiEX LLC v. Williams, which both hold that state law is not preempted by federal law as applied to Kalshi’s sports-event contracts… Nothing in the CEA takes away statutory interpretation from the Courts, and as an administrative agency, the CFTC lacks the authority to dictate an order that conflicts with this Court’s decision.”

As I suspected it would all along, the 2024 Loper Bright decision has made an appearance, which was quoted by Judge Oliver:

“The Court ‘must exercise independent judgment in determining the meaning of statutory provisions.’ Loper Bright Enterprises v. Raimondo, 603 U.S. 369, 394 (2024). It has done so here in finding that Connecticut’s gambling laws do not conflict with the CEA… The CFTC lacks the authority to dictate an order that conflicts with this Court’s decision.”

As I noted pre-prediction markets, “The Chevron Doctrine allowed federal regulators to interpret ambiguous regulations, which the gambling industry and tribal gaming are full of.” Loper Bright overturned that.

And as I wrote in February:

“Post-Loper, courts no longer give agencies the benefit of the doubt on ambiguous statutes. They decide the best reading themselves. So any federal judge (or, ultimately, SCOTUS) confronting the CEA’s definition of “commodity,” “swap,” or “event contract” will do so with fresh eyes — not with a thumb on the scale for the CFTC’s interpretation.”

In short, Loper Bright, which says statutory interpretation belongs to the courts, not the agency, is the basis for Judge Oliver’s refusal to give weight to the CFTC’s position.

New York

On July 31, 2026, New York Attorney General Letitia James (joined by Governor Kathy Hochul) filed a lawsuit in state court against Kalshi, alleging its sports contracts are illegal, unlicensed gambling. New York is seeking a temporary restraining order, plus forfeiture of all illegal gains nationwide and civil penalties, with potential damages of at least $36 billion. Press release from NY AG Letitia James.

On August 11, the CFTC exercised emergency authority and ordered Kalshi to continue operating in New York.

Washington State

On August 13, 2026, King County Superior Court Judge John McHale issued a formal order requiring Kalshi to stop offering numerous event contracts in Washington, including sports, elections, politics, and entertainment. Kalshi must geofence the state (by address) by August 19 and has until September 2 to implement a more robust, third-party solution. The state is also seeking restitution, disgorgement, and civil penalties. Press Release from Washington State AG.

Baltimore

On August 13, 2026, the City of Baltimore filed separate lawsuits in Circuit Court for Baltimore City against Kalshi and Polymarket, alleging the platforms operate as illegal, unlicensed sports-betting operators, violate Baltimore’s Consumer Protection Ordinance, and are operating without a Maryland Lottery and Gaming Control Agency license. The city seeks injunctive relief, civil penalties, restitution, and disgorgement. Kalshi has removed the case to federal court.

New York City

On August 12, 2026, New York City Council Speaker Julie Menin launched a formal investigation into the advertising practices of Kalshi, Polymarket, Coinbase, and Gemini Titan, focusing on what the city believes are deceptive or predatory marketing. Letters requesting information have been sent, and hearings and potential legislation are under consideration.

STTP Thoughts: Kalshi is dealing with a growing number of adverse court rulings, geofencing states becoming a serious issue, and now municipalities are getting involved. The CFTC is taking unprecedented steps to stop the bleeding, but the tide has clearly turned.

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Roundup: So Much News; So Little Newsletter Space

Read of the Week [Wall Street Journal💲]: JPMorgan Ended Banking Relationship With Polymarket Over Regulatory Concerns.

CA tribe removes itself from Kalshi lawsuit [Sports Betting Dime]: “The U.S. District Court of Northern District of California recently approved a joint stipulation for the dismissal of the Picayune Rancheria of the Chukchansi Indians from its lawsuit and ongoing appeal against Kalshi.” The tribe, along with Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians filed a lawsuit against Kalshi in July 2025. STTP Thoughts: The tribe is a CNIGA member and unlikely to suddenly throw its support behind Kalshi — perhaps the tribe just didn’t want to deal with the legal bills — but the removal suggests there could have been some type of settlement or agreement reached, particularly given Kalshi’s statement: “It’s good to see the Picayune Rancheria of the Chukchansi Indians has dropped its appeal. Kalshi is regulated by the CFTC and operates under federal law. We’re very open to working with tribes where our interests align.”

DraftKings announces new rewards program Crown Cash [Press Release]: Last week, DraftKings announced the rollout of Crown Cash across its online casino, sportsbook, DFS, and online lottery products. “The rollout will expand to additional offerings, including DraftKings Predictions, supporting the company’s Super App strategy to create a unified platform.”

White House to host crypto and prediction market meeting [Politico]: “The White House is expected to host a gathering next Wednesday for officials from the cryptocurrency and prediction market industries, according to three people with knowledge of the matter who were granted anonymity to discuss unannounced plans. The details of the gathering remain in flux, and it is unclear who will attend, the people said. The event may also feature executives from the traditional finance world. It is unclear if President Donald Trump will attend.” Several subsequent tweets shed light on who will be present:

News: Howard Stutz Announces Retirement

The industry is losing one of its stalwarts:

“It’s with many mixed emotions that we write today’s message: Our legendary gaming reporter, Howard Stutz, will soon be retiring… More than 40 years after launching his career… Howard is ready to hang up his journalism hat and enjoy the fun and freedom of retirement.”

When I moved beyond poker and started covering the gambling industry in the late 2000s there were a trio of people I looked up to: The late great Dave Palermo was one, Roger Gros (who stepped back from Global Gaming Business a couple of years ago, but still actively writes) was another, and Howard Stutz was the third. The list of poker journalists is too long to list.

I’ve had the privilege to meet and interact with all three (I don’t think any of them are/were aware how much they influenced and shaped my career), and all three have lived up to my lofty expectations.

Around the Watercooler

Social media conversations, rumors, and gossip.

Coffeezilla revisits gambling and prediction markets:

As Straight to the Point previously reported, Coffeezilla has been banging this drum for a while, including this October 2025 video:

More from Coffeezilla on prediction markets in December 2025:

Stray Thoughts

Understand this, there is a small cohort of people in, and on the periphery of, this industry whose job is to say exactly what they are paid to say and/or what their clients want to hear, and then go find evidence for that while ignoring evidence to the contrary.

New York Assemblywoman Carrie Woerner seems to understand this:

• THE LEDE: If prediction markets win, who will come out on top?

• LEGISLATIVE UPDATES: PM and Sweeps updates, plus a look ahead to 2027.

• THE READING LIST: A look at the articles Straight to the Point is reading.

• NEWSLETTER ROUNDUP: The best of the best in gambling newsletters.

Share

Sponsor’s Message: Play’n GO is launching into land-based casinos.

After more than 20 years at the forefront of iGaming, Play’n GO is bringing its world-famous games to land-based spaces, too.

Play’n GO’s unrivalled portfolio of some of the world’s most played online casino games is now available for physical casinos, giving operators the opportunity to harness the power and growth of online casino to bring a new demographic of players into their brick and mortar spaces for the very first time.

With cabinets already placed with one of the biggest casino chains in the world, Play’n GO’s CEO Johan Tornqvist said “We are bringing the best of online casino content and features to casino floors worldwide.”

For more info, visit www.playngo.com

The Lede: Who Will Benefit From The Prediction Market Gold Rush?

Everyone and their brother is getting into the prediction market business, but like the California Gold Rush, the real money isn’t in striking gold, it’s in being in the right place at the right time with the right product to capitalize on everyone trying to strike gold.

I’ve used this analogy in the past, but search functions are now terrible, so I can’t locate the original article, which might only be available on the Wayback Machine after affiliates purged so much content from their sites. Since I don’t want to spend hours trying to locate it, here’s the gist of it.

Hundreds of thousands of young men travelled west during the California Gold Rush to make their fortune. Most of them lost money.

However, there was another set of people that made the trek for a different reason: Storekeepers, suppliers, saloon owners, bankers, gamblers, and anyone else that realized the hordes of men looking to strike gold would also need goods and services, or a place to spend their newfound riches.

The classic example is Samuel Brannan who is credited with popularizing the Gold Rush, while at the same time cornering the market on pans, picks, and shovels, and selling them at a huge markup, making him California’s first millionaire, and giving us the saying, “During a gold rush, sell shovels.”

Which brings me to today’s topic: What is the real prediction market opportunity? Assuming prediction markets prevail (a huge assumption) where is the money going to be found?

Sports betting operators sunk hundreds of millions of dollars into their products and marketing, expecting to be reaping the rewards of that investment down the road. Many have already cut their losses, and if prediction markets prevail, the down the road riches might never materialize for the rest.

So what are they doing? Pivoting into prediction markets and promising to spend hundreds of millions of dollars to grab market share, and yup, you guessed it, profit down the road.

Meanwhile, suppliers, affiliates, data providers, media and broadcast companies, the leagues, and a boatload of consultants and lawyers were printing money for several years during the sports betting boom, and they’ll continue to do so with prediction markets.

So, who else could be the Samuel Brannan and Levi Strauss (a late arriver in 1853, who saw a need and filled it) of a prediction market boom?

Flutter seems to be of the mind that there is a new opportunity as a market maker.

During its Q2 2026 earnings call, the company said it expects to generate approximately $50 million in market-making revenue in 2026, specifically around combos (parlays).

Outgoing CEO Peter Jackson said:

“We believe we’re also uniquely positioned to provide liquidity for combination markets across different prediction market platforms with a market-making offering that can scale rapidly and at low incremental investment. It is very early days, but we would expect to generate approximately $50 million of revenue from Market Making this year, demonstrating both the good progress made so far and the potential opportunity.”

CFO Rob Coldrake added that the company is “really excited about the opportunity in market making,” calling it a “really attractive and high-margin segment,” and highlighting Flutter’s advantage in “pricing complex and correlated markets” by leveraging its years of experience as a bookmaker.

Legislative Updates

Straight to the Point has updated its Prediction Markets and Sweepstakes trackers, as well as publishing my first look at Online Casino Candidates heading into 2027-2028.

Some of what you receive with a Forecast Tier subscription

The Reading List: Suggested Reading from STTP

• 💲Kalshi’s C.E.O. Isn’t Interested in Management Advice [New York Times]

• Is sports betting really that bad? [Isaac Saul, Tangle]

• Circa’s Stevens rips prediction markets [CDC Gaming Reports]

• In Gambling Industry, No Election Looms Larger This November Than Texas Lieutenant Governor [Eric Raskin, Casino Reports]

Watch of the Week:

Newsletter Roundup: Best of the Week in Substack Land

The Closing Line

Everybody In Sports Betting Is Building The Same Thing: Parlays (Or Combos)

Parlays now account for roughly one-third of all money wagered with American sportsbooks—and closer to two-thirds of operator revenue. Those numbers are trending even higher for prediction markets…

Read more

18 days ago · 8 likes · 1 comment · Eric Ramsey and Dustin Gouker

Boys & Men Online

Sports Betting Education Must Go Beyond the Math

Introduction: Isaac Rose-Berman is a fellow at AIBM focused on gambling research and policy…

Read more

21 days ago · 4 likes · 2 comments · Isaac Rose-Berman

How Gambling Works

How Should We Teach Kids About Gambling?

Editor’s Note: This was originally published on menonline.org…

Read more

18 days ago · 8 likes · 3 comments · Isaac Rose-Berman

Secure Stakes by Matthew Wein

The Wisdom of the Crowd Machine

Speed Read (Get the headlines here and read on below). [Publisher’s Note: Secure Stakes is getting close to 500 subscribers. If you know someone who would enjoy reading this, please pass it along…

Read more

22 days ago · 1 like · SecureStakes

The EKG Line

EKG Line: Who Grew iCasino The Fastest in 2Q?

Read more

a month ago · 8 likes · The EKG Line

Straight to the Point has put each state into one of four categories:

1. Contenders

2. Dark Horses

3. Longshots

4. Black Swans

These rankings are fluid. A single election, budget deficit, scandal, or change of heart from an online opponent could change any state’s position overnight.

Read more

• THE LEDE: Nevada Council on Problem Gambling severs ties with the NCPG.

• ROUNDUP: A look at the stories you may have missed.

• VIEWS: Is there a good definition for gambling? Yes and no.

• QUICK HITTER: Alabama lawmaker talks gambling expansion.

• AROUND the WATERCOOLER: Prediction markets (and polls) miss big in WI.

• STRAY THOUGHTS: Tough, straightforward questions.

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The Lede: Another State Cuts Ties With the NCPG

Editor's Note: This entry originally identified the Nevada Gaming Control Board, not the Nevada Council on Problem Gambling as withdrawing from the NCPG.

The Nevada Council on Problem Gambling Board is cutting ties with the National Council on Problem Gambling. The Nevada Council confirmed to the Nevada Current that it “intends to formally sever ties this month with the National Council on Problem Gambling over the latter’s partnership with Kalshi.”

This is the second state to take such an action. In July, the Michigan Gaming Control Board sent a letter to the NCPG saying it was withdrawing its membership:

“Accordingly, MGCB is formally withdrawing its membership from NCPG. Please remove all references to the MGCB’s membership or affiliation with NCPG immediately. Additionally, MGCB employees will no longer serve on any board or committee of NCPG and will no longer attend any NCPG events, including the annual conference.

“Finally, please note the MGCB is cancelling its paid sponsorship for the conference scheduled at the end of July. We will follow up separately to address any steps necessary to ensure all references to MGCB sponsorship are removed.

“I regret that this action is necessary but trust you understand the MGCB’s need to ensure that it is not associated with organizations that are affiliated with companies engaged in illegal gambling.”

As I noted in my July newsletter entry on the MGCB’s withdrawal from the NCPG, the NCPG’s decision to onboard and create a new Financial Services & Trading Membership Subcategory for Kalshi (after a $2 million annual commitment) hasn’t sat well within the industry.

Nor was this hard to see (at least it was clearly visible to me) as soon as Kalshi joined earlier this year:

“My gripe isn’t with Kalshi joining, it’s the way the NCPG let it join.

“The NCPG was long viewed as the most credible voice in responsible gaming. In recent years, however, it has increasingly appeared to prioritize funding. That has led to accusations that it has created pathways for well-funded organizations to reduce scrutiny.

“The NCPG created a special category for Kalshi, and said nothing about the company’s letter to Congress where Kalshi highlighted its NCPG membership (the proverbial ‘get-out-of-jail-free-card’ I warned about) all the while, referring to it as ‘responsible trading.’

“And more recently, we have the NCPG releasing survey results on prediction markets (curious timing), where the group seemed hesitant to call prediction markets gambling in the press release.”

And if we’re being honest, some of these states may have been looking for a way out, particularly given the NCPG’s struggles to remain relevant after the departure of longtime executive director Keith Whyte, who was seen as the NCPG, and much of its credibility left with him.

As I wrote in May: “The NCPG used to be the gold standard on this front, until longtime executive director Keith Whyte parted ways with the organization in January 2025.”

The question I have is, who is going to step in and step up and assume the gold standard mantle? As always, feel free to shoot me an email.

Roundup: So Much News; So Little Newsletter Space

France looks to add online gambling loss-limits for young adults [SBC News]: A whistle-to-whistle advertising ban failed, but French politicians are considering restricting online gambling in several ways through a bill that “seeks to modernize oversight and financial controls over sports leagues, introduce new governance rules for professional football, and strengthen enforcement against audiovisual piracy.” Per Jake Pollard, “The discussions have also cleared the way for the introduction of loss limits for 18-to-25 year olds.”

VGW’s LuckyLand Slots is exiting the US [Covers]: “Sweepstakes casino operator Virtual Gaming Worlds (VGW) is permanently closing its North America-facing brand, LuckyLand Slots, on Sept. 14, ending an eight-year run for one of the most recognized names in the sweepstakes casino industry that was available in 44 states.” As Covers noted, “The shutdown also arrives during a turbulent stretch for VGW. Founder Laurence Escalante stepped down as CEO and executive chairman in July after facing criminal charges in Australia related to domestic violence and drug offenses.”

Underdog appoints former Kalshi exec as Director of Markets [X]: Underdog [a newsletter sponsor] has appointed Noah Zingler-Sterling, the former Head of Operations at Kalshi, who went on to cofound a prediction market venture fund originally 5c(c) Capital, later rebranded UFO Holdings. As Front Office Sports’ Ben Horney tweeted, “Kalshi’s former head of operations who launched a $35m prediction market industry-focused fund has joined Underdog, weeks after its sale to IG Group. Polymarket’s Shayne Coplan, Kalshi’s Tarek Mansour, and Novig’s Jacob Fortinsky are among those who agreed to invest in his fund.”

CFTC releases advisory on Self-Certification of Incentive Programs [CFTC]: “The Commodity Futures Trading Commission’s Division of Market Oversight today issued an advisory reminding designated contract markets of their regulatory obligations when submitting self-certifications for market-maker, liquidity, trading, or incentive programs under CFTC Regulations 40.5 and 40.6. This advisory addresses concerns regarding an increasing number of incentive‑program rule filings submitted under CFTC Regulation 40.6(a)—particularly those relating to event contract products—that contain procedural or substantive deficiencies.”

Grandstand rolls out debit card for gamblers [Press Release]: Newly branded Grandstand (nee Gambling.com Group) “Announced the public launch of Rollcard, a Visa debit card purpose-built for high rollers, including sports bettors, casino players and prediction market traders. Rollcard is a high-limit debit card linked to a dedicated deposit account that keeps a player’s bankroll separate from their everyday finances, offers cashback rewards on qualifying spend, enables high transaction limits, and adds security through the backing of Visa’s global payment network.” STTP Note: The first company to offer such a product is former newsletter sponsor Edge Markets. You can learn more about Edge Markets and the Edge Boost Card in my previous podcasts with CEO Seni Thomas (here and here), as well as its recent fundraising and launch of a dedicated banking platform for market makers for prediction markets.

Quote of the Week: “I do think predictions markets are feeding into a more growing narrative of how much is too much in terms of gaming.” ~ Oliver Barie, Government Affairs Director for the National Association Against iGaming (Oliver was a guest on the Straight to the Point Talking Shop Podcast in February).

Views: The Question of Our Time: What Is Gambling?

Is this the perfect definition of gambling?

While this is specifically looking at beatable games like poker, sports betting, and prediction markets, there is a larger lesson. If the noise (volatility) is much larger than the signal (EV), you’re gambling.

One thing most people overlook is standard deviation, or volatility.

There’s a famous MIT lecture by Professor John Tsitsiklis (you can find a bunch of these lectures here) about coin flips, where you start with $10,000 and flip a coin 100 times: heads produces a 50% gain and tails a 40% loss, or a 5% expected value per flip, which should result in your $10,000 becoming $1.3 million; the veritable license to print money.

But here’s what really happens.

When volatility is high, the growth rate you actually experience is dragged down by about half the variance, so most people will end far below that average (the median return in this experiment is $52).

Only 13.8% of participants in this experiment would finish the 100 flips with at least their initial $10,000 stake.

A tiny number of people will get extremely lucky and pull the overall average up — about 2.8% of people will end up with $100,000-$1 million, and an extremely lucky group of 1.8% of people will get over $1 million.

When we look at gambling, it gets even wilder: Slot machines pay out somewhere in the neighborhood of 90-95%, but how many times does someone insert $100 and walk away with $90, or any amount near their initial stake?

The vast majority of people leave with far less (often $0 or a small fraction of what they put in), while a very small number of players hit huge jackpots and walk away with huge paydays. Those rare huge wins are what push the overall average up to 90–95%.

But in a low variance game like blackjack, the distribution curve is very different. Starting with $100, and playing $5 a hand for 50 hands would result in 85% of people ending with $50-$150.

As Professor Tsitsiklis puts it, “The average of a function of a random variable, in general, is not the same as the function of the average… in general, you cannot reason on the average.”

Quick Hitter: AL Lawmaker Questions Gambling Expansion

Alabama is one of several states to keep an eye on for gambling expansions, but at least one prominent lawmaker isn’t fully on board.

State Sen. Sam Givhan told Yellow Hammer News that while many people favor the authorization of a lottery in Alabama (one of five states without lottery products), he’s less sure about casinos and other expansions:

“People want a lottery. They don’t want the casinos... I mean, there’s no way if somebody tried to produce a constitutional amendment that said we want to do these bingo parlors… or full-blown casinos and we want to do this and that without being connected with a lottery, there’s no way it ever gets through the Legislature.”

Givhan was skeptical of the idea that legalization is the answer, and isn’t buying the ‘we have to broaden gambling to control gambling,’ argument. “Why don’t we just enforce the laws we have on the books?” Givhan said. “There are ways we could come up with a task force… but that’s not ever part of the equation. It’s always no no no no. We got to expand gambling.”

Around the Watercooler

Social media conversations, rumors, and gossip.

The Democratic primary for governor of Wisconsin shows the fallibility of the “truth machines” narrative.

Notice the candidates not-named Francesca Hong were trading at less than 5% on Polymarket (Substack allows me to embed Polymarket odds) until the ballots started being counted:

In short: Prediction markets miss again (and so did the polls, which had Francesca Hong winning by 20 points). And prediction market naysayers are having a field day with it:

Stray Thoughts

This is a wild interview, and I’m actually pretty surprised he would agree to this interview given the company’s current legal battles — I’m just not seeing the upside for Kalshi here.

• THE LEDE: Bally’s pauses construction in Chicago over VGTs.

• ROUNDUP: A look at the stories you may have missed.

• NEWS: CFTC exercises emergency authority against NY.

• BEYOND the HEADLINE: The CFTC “gives a shit about the rules!”

• AROUND the WATERCOOLER: Congress questions FanDuel’s VIP practices.

• STRAY THOUGHTS: The end game.

Share

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The Lede: Bally’s Pulls Back as Chicago Preps for VGTs

Bally’s just hit the pause button on non-gaming construction at its $1.7 billion Chicago casino and is threatening to withhold annual payments to the city over the rollout of video gaming terminals.

That’s one of, if not the, most significant developments yet in what has been a rollercoaster two years for Illinois gaming.

First came the sports betting tax hikes:

• In 2024, Illinois replaced the state’s flat 15% sports betting tax rate with a tiered structure starting at 20% and scaling to 40% based on operator revenue.

• In 2025, Illinois added a per-wager fee on every mobile wager: $0.25 per bet on the first 20 million wagers in a fiscal year; $0.50 per bet thereafter.

• In late 2025, Chicago added its own 10.25% tax on sports betting revenue from bets placed in the city — Chris Altruda tracks this every month for Straight to the Point.

Still, the more consequential battle is the one between Bally’s and the city’s VGT rollout:

• Bally’s proposed a $1.7 billion integrated resort and was awarded the single Chicago casino license in 2022.

• The company opened a temporary casino in 2023, but the project has been mired by delays and projected revenue has fallen well short of initial estimates.

• Chicago legalized VGTs in its $16.6 billion 2026 budget, and that’s where these two threads intersect, as Bally’s believes it violates its 2022 Host Community Agreement (HCA) in spirit, and specific language about not authorizing other forms of gambling in the city.

With that as the backdrop…

Per the Chicago Tribune, “Bally’s issued a notification to the Chicago Community Builders Collective (CCBC) that it is resetting the pace of construction of elements of Bally’s Chicago permanent casino,” the company said in a statement. “The potential for an uncontrolled proliferation of video gambling terminals (VGTs) is in breach of the City’s commitment not to expand gaming in the Host Community Agreement (HCA) and creates uncertainty that could be harmful for Bally’s Chicago prospects.”

On the opposite side of Bally’s is Accel Entertainment, which, per Citizens, announced “the Illinois Gaming Board has begun issuing approvals for Chicago, with 17 locations, or 44% of its proposed sites.” As I said last week, “Accel is a company I’ve kept a close eye on for many years because the path to legalizing online casinos in Illinois runs through the company.”

Roundup: So Much News; So Little Newsletter Space

Tribal Gaming: Commissioner role at NIGC remains vacant [AP]: The CFTC, currently operating with just one of its five commissioners, isn’t the only regulatory body that needs vacancies filled: “The last chairperson of the National Indian Gaming Commission stepped down from the role in January. President Donald Trump has not nominated anyone to fill the vacancy. Absent a chair, the commission is unable to perform some key responsibilities, like enforcing legal and safety violations, approving new tribal gambling laws and certifying management agreements between tribes and casino operators.”

DraftKings self-certifies parlays for its in-house exchange [InGame]: DraftKings’ parlays may soon shift from Crypto.com to its in-house, DKeX exchange, after the company self-certified the contracts last week: “The filing submitted to the Commodity Futures Trading Commission (CFTC) covers a contract titled ‘Will all [outcomes] occur?’ It settles based on “the joint outcome of two or more constituent contracts,” using their rules.”

UNLV announces oral history of NV bookmakers project [UNLV]: “As legal sports betting continues to expand across the United States, the UNLV Oral History Research Center is launching a new project to preserve the firsthand stories of the Nevada bookmakers who helped build the industry. The initiative brings together Richard Schuetz, CEO of American Bettors’ Voice, and David G. Schwartz, gaming historian, author, and ombuds at UNLV, to help identify 10 historically significant bookmakers whose stories will be preserved as part of the project. Schuetz and Schwartz will assemble an advisory committee to identify participants whose interviews will become part of the permanent collection of the Oral History Research Center in the UNLV Libraries. The oral histories will be available to historians, researchers, and the public.”

Howe’s FanDuel severance potentially larger than reported [Next.io]: “Former FanDuel boss Amy Howe’s exit deal is worth significantly more than previously reported – and includes a million dollars for her lawyers.” When Howe announced her departure in May, it was reported she would receive ~4 million, that number is now much higher: “As well as the headline severance, Howe is also entitled to a Value Creation Award, a type of compensation awarded at the time of her appointment in 2021 [which could be worth up to $12.5 million]… the deal also preserves a great deal of Howe’s stock-based compensation.”

FlightAware sues Kalshi, then voluntarily dismisses case [Event Horizon]: As if Kalshi wasn’t dealing with enough lawsuits: “FlightAware sued Kalshi in the Southern District of New York on Monday, accusing the prediction market of breach of contract and trademark infringement, among other things. It is asking a federal judge to block Kalshi from using its name and data, in addition to damages.” Major Update: Less than 24 hours after filing, FlightAware voluntarily dismissed the case, which attorney Ariel Givner noted is a sign the two parties reached an agreement: “FlightAware just VOLUNTARILY DISMISSED its entire lawsuit against Kalshi. Again, filed yesterday seeking emergency relief over the flight-cancellation betting markets. Dismissed today under Rule 41(a)(1)(A)(i) (without prejudice) before Kalshi even answered. When a plaintiff drops a case this fast after demanding a TRO, it usually means the parties worked something out privately.
Case closed (for now).”

Kalshi beefs up market monitoring with Nasdaq partnership [Kalshi News]: Kalshi has entered into “a multi-year partnership with Nasdaq Market Surveillance to enhance monitoring and oversight of trading activity on its markets. The agreement forms one component of Kalshi’s broader approach to market oversight, complementing the exchange’s existing surveillance framework.” STTP Thoughts: While the company catches a lot of flak, it is doing far more than most to address the major criticisms leveled against it.

Quote of the Week: “To what extent do we feel like this is risk management and hedging, which is a derivatives purpose—regulated at the federal level? And to what extent is this gambling—which has traditionally been regulated at the state level? As chairman of the subcommittee that oversees commodity markets… it’s my job to try to find out whether or not there is path for legislation that would answer some of these open questions. I think it’s a really difficult path. I’m in the process of drafting legislation… But if I’m being honest, I think it is going to be really hard to find a product that could get 60 votes in the United States Senate.” ~ US Rep. Dusty Johnson, who chairs the subcommittee on Commodity Markets, Digital Assets and Rural Development on the 1934 Commodity Exchange Act not keeping pace with current technology.

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News: CFTC Tells Kalshi to Continue to Operate in NY

For the second time, the Commodity Futures Trading Commission exercised its emergency authority, and told a prediction market to ignore a negative court ruling and continue operating in a state. In July, the CFTC used its emergency authority to order Kalshi to ignore a temporary restraining order from a Michigan state circuit court that had directed Kalshi to shut down sports-related markets for Michigan users and void/cancel those trades.

Yesterday, the CFTC once again exercised its emergency authority, telling Kalshi “to continue to operate… after New York Attorney General Letitia James filed a complaint against the exchange in state court. In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.”

However, as Daniel Wallach noted, the decision is in the hands of the courts, not the CFTC’s lone commissioner:

And as Chris Lynch, the Managing Director of Gaming & Leisure Investment Banking at Citizens Bank put it:

Beyond the Headline: The CFTC Likes Proposing Rules

The Commodity Futures Trading Commission (CFTC) is proposing even more new rules, this time to address conflicts of interest between prediction markets and their trading arms:

Per the press release [Sportico has an excellent writeup on it here]:

“The Commodity Futures Trading Commission (“CFTC” or “Commission”) is proposing new rules and amendments to its existing regulations for futures commission merchants (“FCMs”), swap execution facilities (“SEFs”), designated contract markets (“DCMs”), and derivatives clearing organizations (“DCOs”) (the “Proposal”). The Proposal addresses requirements relating to financial oversight of FCMs by self-regulatory organizations (“SROs”) and designated self-regulatory organizations (“DSROs”), as well as disclosure requirements by FCMs regarding affiliate relationships that an FCM has with a SEF, DCM, or DCO. For SEFs, DCMs, and DCOs, the Proposal would also establish requirements, including conflicts of interest rules, to address those registered entities’ relationships with certain affiliates, such as FCM affiliates and affiliated principal trading firms. The Proposal includes guidance regarding the implementation of safeguards to protect the impartiality of SEFs, DCMs, and DCOs, including where applicable in their role as SROs or performing SRO functions with respect to certain affiliates. The guidance addresses the sharing of resources including staffing, technology, and office space, and limitations on the sharing of non-public information.”

This follows proposed rules for prediction markets, which were formally announced in March 2026, as well as:

• June 10, 2026: CFTC Seeks Public Comment on Notice of Proposed Rulemaking Concerning Event Contracts Involving Enumerated Activities

• June 25, 2026: CFTC Seeks Public Comment on Notice of Proposed Rulemaking Concerning Data Reporting Requirements for Certain Event Contracts

There are also several advisories, including:

• March 12, 2026: Guidance to DCMs on listing/trading event contracts

• July 24, 2026: Advisory on self-certification

Of course, if the CFTC just denied sports contracts, like it has historically done, none of this would be necessary.

As former CFTC General Counsel Rob Schwartz joked on X about the CFTC executing its emergency authority (with a strong follow-up tweet by industry reporter Geoff Zochodne):

Around the Watercooler

Social media conversations, rumors, and gossip.

In the wake of the Bryce Harper Cameo scandal, Sen. Richard Blumenthal, Rep. Paul Tonko, and Rep. Valerie Foushee sent a letter to MLB and the MLBPA, as well as a letter to FanDuel CEO Christian Genetski, demanding “FanDuel end the so-called ‘VIP’ services that drive problem gamblers into debt and relapse.”

The letter requests FanDuel answer the following eight questions:

1. What measures does FanDuel take to absolutely ensure that bettors are not suffering from financial hardships or a gambling addiction prior to enticing further gambling?

2. What steps has FanDuel taken to monitor interactions between managers and VIPs to ensure that managers are not offering predatory offers to problem gamblers?

3. How many VIP bettors have attempted to cut back their betting activity or close their accounts but were instead offered exclusive perks or offers? How many decided to keep betting after such offers?

4. Does FanDuel ever target VIP promotions and perks to bettors who are on a losing streak or appear to be cutting back on wagering?

5. How many times have VIP managers sent videos from players or other celebrities to a member in order to keep them engaged in gambling on the platform, and were those players made aware of the purpose of those videos?

6. Does FanDuel ever coach or train its VIP managers to develop personal relationships with their clients in order to encourage more gambling?

7. What specific factors does FanDuel consider when identifying “potentially problematic behaviors” and why has this allowed FanDuel to use its VIP program to encourage destructive gambling?

8. In light of the clear dangers posed by FanDuel’s VIP program to problem gamblers, will FanDuel suspend or terminate this program?

At the state level, Massachusetts has led the way when it comes to looking into VIP programs, but this is the first inkling of federal action, and as I often say (credit to Richard Schuetz), with Congress looking into prediction markets, sports betting, the gambling loss deduction, and more, beware the camel’s nose under the tent.

As I noted in a February 2024 column on VIP practices:

“Reining in sports betting marketing is a hot topic in responsible gambling circles. Cutting down on ads. Ensuring ads aren’t targeting underage or vulnerable populations. Changing the terminology used in advertisements. These efforts are all well and good, but they miss a glaringly obvious opening that no one seems to want to close: The VIP customer.

“As responsible gambling consultant Jamie Salsburg tweeted in May 2023, ‘The current wave of sports betting regulatory response is WILD! But just wait until someone introduces them to the use of VIP schemes.’

“‘I’ve been surprised at how little talk there has been of VIP treatment here in the USA, but I think this high-profile tug-of-war could bring it to the forefront,’ Salsburg told Straight to the Point.”

If you want to understand why VIP programs could be a significant issue, look no further than this tweet:

Stray Thoughts

I think we’re entering the put up or shut up phase of the prediction market debate.