Throwing Down the Gauntlet
Kalshi and Robinhood have planted their flag in sports betting, but is their foray into sports a full incursion or a border skirmish, and will it be temporary or permanent?
The Bulletin Board
THE LEDE: Kalshi and Robinhood launch March Madness markets, Now What?
ROUNDUP: NY Sweeps bill advances; NY casino project; MO bill would regulate VLTs; Federal bill prohibits college props.
NEWS: Underdog will apply for a Missouri sports betting license.
VIEWS: What’s behind Penn’s opposition to online gambling bills?
AROUND the WATERCOOLER: The public is ok with a college betting ban.
STRAY THOUGHTS: Don’t push me, ‘cause I’m close to the edge…
SPONSOR’S MESSAGE - Yes, Sporttrade is indeed a prediction market. Always has been.
The Lede: Prediction Markets Draw a Line in the Sand
As I wrote in a recent column, prediction markets are setting the stage “for a seismic shift in how America bets—on sports, elections, and more.”
Exactly how this one will shake out is anyone’s guess, but after the announcement that Kalshi is teaming up with Robinhood to offer March Madness markets in all 50 states (to anyone 18+), we will find out very shortly.
The critical part of the announced partnership is this line from the Robinhood press release: “We have been in close contact with the CFTC over the past several weeks and look forward to continuing to work with them to promote innovation in the futures, derivatives, and crypto markets.”
That certainly looks good for the future of prediction markets, but they might not want to unfurl the “Mission Accomplished” banner just yet.
While trending positive, the CFTC has yet to officially weigh in (a roundtable is slated for the coming weeks), and there are some politically powerful groups and organizations sitting on the other side of the debate stage.
Also, the court case is not the final one (and likely not the last lawsuit filed). Recall that New Jersey lost every court case during its multi-year effort to repeal PASPA before the Supreme Court agreed with the state’s arguments.
There is also:
The recent action taken by the Nevada Gaming Control Board.
Swelling opposition from entrenched casino and sports betting stakeholders and sports leagues.
The still yet-to-be-fully-unleashed might of responsible and problem gambling advocates, who may have some qualms about the accessibility of these products and the lack of anything resembling RG/PG guardrails.
In its takeaways from the Next.io Conference, The Innovation Group wrote that the industry sentiment is on the side of sweepstakes (which I looked at on Monday) and prediction markets:
“Despite the headwinds of cease-and-desist letters and adverse legislative efforts at what seems to be every turn, the overwhelming sentiment is that sweeps casinos and prediction markets are here to stay, and that the “duck test” just doesn’t matter (both of these surely “quack like a duck,” if you’ll forgive the metaphor). M&A in the space was a hot topic both on- and off-stage, which is welcome since there’s little action in traditional land-based M&A at current rates; but broader regulatory uncertainty makes valuations, and hence dealmaking, difficult. My take: the industry won’t wait for full regulatory clarity before moves are made.”
STTP’s opinion is that the cake is undoubtedly baking, but unlike the sentiment at Next, it’s not fully baked and could be taken out of the oven at any point in the process — or tossed on the floor while it’s cooling.
Roundup: NY Casino Project; MO Bill Would Regulate VLTs; Federal Bill Prohibits College Props
New York sweepstakes bill passes committee: Legislation prohibiting sweepstakes casinos in New York has passed the Senate Racing, Gaming and Wagering Committee and is on its way to the Senate floor. S 5935 was sponsored by New York State Sen. Joseph Addabbo Jr. and has companion legislation in the Assembly: AB 6475, introduced by Assemblywoman Carrie Woerner, who chairs the Assembly Racing, Gaming and Wagering Committee. The SPGA said the bill strongly “recklessly mischaracterizes sweepstakes gaming and threatens legitimate businesses with unnecessary and harmful regulation,” in a statement.
Citi Field casino proposal gets a boost: Steve Cohen’s proposed New York City casino project took a giant step forward last week. Per local press, “The City Council voted 41-2 in favor of the proposal, a planned development by New York Mets owner Steve Cohen and Hard Rock Entertainment that would convert a 50-acre parking lot west of Citi Field into an entertainment complex with a casino as its centerpiece.”
Missouri bill would regulate VLTs: Missouri HB 970 would set up a framework for gaming machines outside casinos, set up by licensed operators. The bill has passed the committee stage and can now be heard on the House floor. Jan Zimmerman, the chair of the Missouri Gaming Commission, told the local press that she is not familiar with the bill's specifics but supports the regulation of outside gaming machines.
Federal bill would prohibit college prop bets: (h/t Casino Reports) for finding this bill that somehow escaped attention: “The Providing Responsible Oversight and Transparency and Ensuring Collegiate Trust for Student Athletes Act, or the PROTECT Act — was written by first-term Congressman Michael Baumgartner (R) of Washington. He doubles as the chair of the College Sports Caucus.” And if you jump down to the Watercooler section, you’ll see that the bill is likely pretty popular.
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News: Underdog Targets Missouri Sports Betting Launch
Underdog Fantasy (a newsletter sponsor) plans to apply for a Missouri sports betting license when the application process opens, according to reporting from Sports Betting Dime.
If approved, Missouri would be Underdog’s fourth sports betting license, as it already possesses licenses in North Carolina, Ohio, and Colorado — Underdog has launched its sports betting product in North Carolina.
Underdog is one of eight online sportsbooks that went live in North Carolina in March 2024, alongside the biggest names in the US sports betting space: bet365, BetMGM, Caesars, DraftKings, FanDuel, Fanatics, and ESPN Bet.
Thus far, the company has been a tiny blip on the handle and revenue radar, with a market share that barely registers on Eilers & Krejcik Gaming’s (a newsletter sponsor) revenue estimates for the state. Underdog’s North Carolina is more trial balloon than finished product.
Underdog CEO Jeremy Levine told STTP before the company’s debut in North Carolina that Underdog Sportsbook would be “clean, simple, and easy to use.” Levine said to expect enhancements, and that by the 2025 NFL season, “Underdog will be the best way for fans to engage in sports.”
Views: Penn’s Qualified Opposition to Online Casinos
If you’ve been paying close attention to recent online casino legislative hearings, you’re likely aware that Penn Entertainment has begun opposing online gambling bills, at least as they are currently proposed.
Illinois: Penn spoke against an online casino bill at an informational hearing held by the Illinois House Gaming Committee last week. As mentioned in “The Lede” above, “The economic impact of iGaming is uncertain, but the potential negative consequences are clear: The proliferation of online gaming could reduce in-person casino traffic, threatening jobs, lowering the economic benefits to local communities and ultimately discouraging future investments in the state,” Penn lobbyist Jay Keller said.
Mississippi: The Clarion-Ledger obtained a letter from a group of eight casino industry players that oppose mobile sports betting legalization as proposed: "A State-wide expansion of gaming, with no local referendums, putting a casino in the hands of every person in Mississippi, no matter where they are located (homes, schools, churches) …This is not the right vision for gaming in Mississippi," the letter reads. The Clarion-Ledger didn’t disclose the signatories, but given its comments in other states, Penn is likely to be one of the eight.
Maryland: As STTP reported during Maryland’s online casino hearing, “In addition to Cordish and labor unions, PENN Entertainment opposes the legislation (but, notably, not online gambling). The company appears to be positioning itself as pro-online casinos but on land-based-friendly terms.”
Indiana: As reported in STTP, “Another casino company that has voiced concerns about untethered online licenses is Penn Entertainment, which operates The Hollywood Casino Lawrenceburg in Indiana — Penn opposed the pull tab language in the bill, which was removed.” It’s unclear if the removal changed Penn’s position on the now-dead bill.
Bottom line: Penn is not opposed to online gambling but would like to see licenses restricted to in-state, land-based operators to mitigate any potential cannibalization — in a forthcoming feature column, I will examine what I believe is one of the biggest missteps of the post-PASPA era: untethered licenses.
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Around the Watercooler
Social media conversations, rumors, and gossip.
More polling that indicates the public is growing increasingly frustrated with sports betting, this time from the AP:
“The survey from The Associated Press-NORC Center for Public Affairs Research shows that about 6 in 10 Americans think betting on professional sports should be legal in their state, but only about 4 in 10 U.S. adults say the same thing about legalized wagering on college sports. More than half oppose legal betting on college sports.”
The poll also found that 26% of adults (and 35% of men) fill out a March Madness bracket every or some years.
Stray Thoughts
Apropos of today’s lead story:
"Everyone has a plan 'til they get punched in the mouth." ~ Mike Tyson
"The edge… there is no honest way to explain it because the only people who really know where it is are the ones who have gone over." ~ Hunter S. Thompson