No Soup For You
Unlike sports betting, online casinos have run into a mountain of opposition due to cultural, economic, and legal challenges, plus a lack of unified support.
The Bulletin Board
THE LEDE: Eight more reasons online casino efforts can’t get traction.
ROUNDUP: Kalshi March Madness trading update; CT gambling bills; AL discussing gambling expansion; Is a NY sweeps crackdown coming?
NEWS: New York casino proposals, the best of the rest.
AROUND the WATERCOOLER: Betting on Canadian election at all-time high.
STRAY THOUGHTS: New target acquired.
SPONSOR’S MESSAGE - Yes, Sporttrade is indeed a prediction market. Always has been.
The Lede: 8 Reasons Online Casino Efforts are Failing
I recently wrote that the industry shot itself in the foot twice in its rush to legalize sports betting following the Supreme Court’s 2018 PASPA ruling (with the help of obliging state legislatures) by:
Allowing untethered mobile betting licenses
Not putting guardrails in place to rein in marketing
Today I want to look at eight other hurdles that have prevented online casino legalization:
It’s easier to legalize an unregulated product than to reverse a prohibition
DFS operated in a legal gray area for years, marketed as a game of skill, which allowed it to gain traction before it landed on the regualtory radar. Sports betting was restricted under PASPA, but once it was repealed, the floodgates were open and states were operating from the viewpoint that they were released from prison. Online casinos, however, often start from a fully illegal status (and a product that some existing stakeholders feel is a threat), requiring lawmakers to overcome entrenched prohibitions rooted in decades of anti-gambling laws.
Cultural stigma
The image of a lone player glued to a slot machine — digital or physical — evokes stronger fears of addiction and social harm than a sports fan betting on a game or a group of friends drafting a fantasy lineup. Online casinos amplify this with 24/7 access and aggressive marketing which studies and media often highlight as predatory. That image makes legislators hesitant, as they face louder public backlash compared to the more socially normalized contexts of DFS and sports betting. Whether true or not, slot machines and gambling tables (especially online) are seen as more harmful.
Cannibalization concerns (from everywhere)
Land-based casinos worry online platforms will siphon their customers, causing revenue and jobs to decline, but the threat extends further. State lotteries (especially those that sell tickets online), which fund public programs, fear losing players to online slots. Video gaming terminals (VGTs) and video lottery terminals (VLTs) in bars or truck stops—lucrative for small businesses and local governments—also see online casinos as direct competitors, as both appeal to convenience. This multi-front opposition creates a coalition of vested interests lobbying against online casino expansion that was far less pronounced with DFS or sports betting, which don’t overlap as directly with these revenue streams.
A PASPA-like event
The 2018 Supreme Court decision striking down PASPA was a watershed moment for sports betting, unleashing a proverbial tidal wave of state-level legalization as federal barriers were removed. Online casinos lack a comparable trigger—no single court case or federal shift has handed states a clear path or the “mandate” to legalize the activity. Instead, progress relies on piecemeal, state-by-state battles, often bogged down by local politics and competing interests, leaving the industry without the rapid momentum sports betting enjoyed post-2018.
A lack of a unified voice
Sports betting rallied behind a coalition of sports leagues, media giants, and betting companies, all singing the same tune. Online casinos, by contrast, suffer from fragmented advocacy — the fights from a decade ago split the AGA. National casinos like MGM or Caesars have one vision of legalization, while online-first companies have a different vision. Then there are the smaller regional operators or tech startups that have other ideas, and the ones that are completely against it. Without a singular, compelling narrative, policymakers hear a cacophony of arguments rather than a clear case for legalization.
Missing Allies
Sports betting’s success owes much to external allies: the NBA and NFL softened their stances post-PASPA, seeing revenue potential, while broadcasters and media corporations embraced betting as content and a source of ad revenue. Online casinos have no equivalent cheerleaders. Sports leagues don’t care about blackjack apps, and mainstream media rarely frame online poker, let alone slots, as a cultural good. This leaves the industry reliant on its own lobbying (which as noted above is quite fractured), which reeks of being self-serving and fails to tap into broader societal buy-in the way sports betting did.
Legal and regulatory complexity
The complexity of regulating online casino games often deters lawmakers from tackling the issue. In some states, like Florida or California, expanding gambling beyond narrow exceptions requires voter-approved constitutional amendments, not just legislative votes. There are also existing exclusivity agreements (more on this in the next bullet point) and non-compete zones to consider. This raises the bar significantly—amendments need public campaigns, supermajorities, or ballot initiatives, all of which are costlier and riskier than the statutory changes often sufficient for sports betting or DFS.
Tribal opposition and exclusivity agreements
In states with tribal gaming compacts, like Oklahoma or California, tribes often hold exclusive rights to casino-style gambling. Online casinos threaten this monopoly, prompting fierce resistance from tribal nations who see their economic lifeline at risk, and who are, at least at present, unable to offer statewide mobile betting without giving up tribal sovereignty. Sports betting, often framed as distinct from casino games, has faced less tribal opposition in some regions, especially where tribes can opt into the market as commercial operators. These exclusivity deals lock online casinos into legal battles that DFS and sports betting have more easily sidestepped, as they are often unmentioned in tribal compacts.
Roundup: Kalshi Trading Update; CT Gambling Bills; AL Gambling Talks; NY Sweeps Crackdown Coming?
Quick update on Kalshi’s March Madness markets: Earlier this week, I noted that Kalshi had seen nearly $200 million in trades during the first two rounds of March Madness. That number looks to be low. Per Casino Reports’ Chris Altruda, “$249 million worth of contracts [have been] created on the Robinhood-partnered platform following the first two rounds of the NCAA College Basketball Tournament.”
Several gaming bills advance in Connecticut, including sweeps ban: (h/t Daniel Wallach) The Connecticut General Law Committee has approved a bill banning online sweepstakes casinos and lottery courier services — the bill also prohibits certain sports wagers; a second bill would allow Connecticut to join the Multi-State Internet Gaming Agreement (MSIGA) and create wagering limits (left undefined) on online sports bets; and a third bill requires sportsbooks to “obtain the permission of all account holders before authorizing any debit, charge or withdrawal on a jointly held debit card or credit card account,” and most importantly, prevents advertising or marketing that includes “any financial incentive in order to induce individuals to engage in gaming.”
SB 1235 — Sweeps and courier prohibition
SB 1464 — Interstate online poker
HB 5269 — Advertising restrictions
Alabama gambling expansions happening “behind the scenes”: During an appearance on Friday's broadcast of Alabama Public Television's "Capitol Journal," Senate Majority Leader Steve Livingston said gambling expansions are happening behind the scenes, but noted the difficulty of getting to the required three-fifths majority for a constitutional amendment. Livingston also said that conversations don’t amount to much: "I think there's only been one time, and that was the fourth year of my first quadrennium, that we did not have a conversation about gambling."
New York’s top regulator points to impending sweeps crackdown: For the second time in 2025, New York State Gaming Commission Chair Brian O'Dwyer has made public comments about sweepstakes sites. “I am concerned by the rise in the so-called sweepstakes casinos, wherein it may appear that online prizes are being offered for free when they are not,” O’Dwyer said during a commission meeting on Monday. He also said the NYSGC is looking into the sites with the help of other agencies, and to expect announcements on what actions will be taken sometime before the commission meets in April. As Sweepsy.com reports, multiple operators are already exiting the state.
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News: New York Casino Proposals, the Best of the Rest
Yesterday, I looked at the Top 5 candidates for the three New York casino licenses expected to be awarded at the end of the year. Today, I will look at the other six proposals.
Avenir (Manhattan): Longshot Candidate
The Proposal: Silverstein Properties partners with Greenwood Gaming to propose a luxury casino development in Manhattan, aiming to blend high-end gaming with urban sophistication.
Opposition: Critics argue a Manhattan casino would oversaturate the area, straining infrastructure and exacerbating existing congestion problems.
The (very weak) case for: The $1.8 billion luxury project faced early rejection from Manhattan Community Board 4 in December 2023 over review process concerns. With less public momentum and fierce Manhattan competition, it struggles to stand out despite its upscale appeal.
Bally’s Links at Ferry Point (Bronx): Longshot Candidate
The Proposal: Bally’s Corporation plans a casino on 17 acres of parkland near the Trump golf course in the Bronx, featuring housing, a hotel, and community amenities like parks and sports fields.
Opposition: The project was overwhelmingly rejected at a local board meeting, with residents saying the project would eliminate valuable parkland and offer minimal community benefits. Factor in Bally’s Chicago problems, and the project is on shaky ground.
The case for: Bally’s $3.1 billion proposal on parkland acquired from Trump in 2023 is good on paper, but lacks any type of local support.
The Coney (Brooklyn): Longshot Candidate
The proposal: Thor Equities, Legends Entertainment, the Chickasaw Nation, and Saratoga Casino Holdings pitch a Coney Island casino with a 32-story, 500-room hotel, a concert venue, and public green space.
Opposition: Coney Island locals and advocates have expressed gentrification concerns that they believe would displace residents and erode the neighborhood’s historic amusement district - these concerns were on full display during a testy hearing last week.
The case for: A $3 billion plan, with a $200 million community investment pledge, could revitalize Coney Island. Local support exists, making it a somewhat viable candidate, but not a top contender.
Freedom Plaza (Manhattan): Longshot Candidate
The proposal: The Soloviev Group and Mohegan Gaming have proposed a mixed-use complex near the United Nations with a casino, 1,325 apartments, a museum, and 4.7 acres of East River green space.
Opposition: Critics, including Assemblymember Deborah Glick, highlight potential traffic chaos near the UN and question the sincerity of its housing promises given the casino focus.
The case for: The Soloviev Group and Mohegan’s $2 billion mixed-use plan near the UN offers housing and green space. It lacks the momentum or political clout of some of the other Manhattan bids.
Saks Fifth Avenue (Manhattan): Longshot Candidate
The proposal: Hudson’s Bay Company's proposal would convert the top three floors of its flagship Saks store into a 200,000-square-foot luxury casino.
Opposition: Retail unions and preservationists argue it would undermine the store’s luxury retail legacy, disrupt Midtown’s commercial balance, and add little beyond gambling revenue.
The case for: Hudson’s Bay Company’s $1 billion luxury casino plan boasts a quick timeline (one year), but its small scale relative to the other projects limits its appeal.
Wynn New York City (Hudson Yards): Longshot Candidate
The proposal: Related Companies and Wynn Resorts propose a $12 billion Hudson Yards development with a five-story casino in an 80-story tower, a 1,750-room hotel, 1,500 apartments, a K-8 school, and a 5.6-acre park, though it faces.
Opposition: Strong local opposition leaves the project’s future uncertain after a January 2025 community board rejection. Opponents of the proposal, saying it threatens the High Line’s tranquility, slashes promised housing, and prioritizes a casino over neighborhood needs.
The case for: With a price tag of $12 billion, this is the most expensive proposal, but after being rejected by Manhattan Community Board 4 in January, the project is seemingly, but not officially, out of the running.
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Around the Watercooler
Social media conversations, rumors, and gossip.
The upcoming election in Canada is a tight one, per Geoff Zochodne’s reporting:
It also looks like it will be the most heavily bet election in Canadian history. As Zochodne wrote in his column on the Canadian election, “As a result [of increased regulated and unregulated betting options], betting on this year's federal election seems likely to eclipse that of any previous vote in Canada.”
Watching from afar, what looked like a Conservative cakewalk shifted to a slight edge for the Liberal party as Canadians became more disheartened with tariffs and the 51st state rhetoric coming from the Trump administration. The Conservatives seemed to have regained some ground in recent days, with the polls and the betting odds now pretty much tied.
Stray Thoughts
This is one of the most ominous social media posts I’ve seen in quite some time.
Sweepstakes is having a hell of a time of late: Prohibition bills progressing in several states, the New York Times deep dive in a column titled The Online Casinos That Can Operate as Long as They Say They Aren’t Actually Casinos, and, as reported yesterday, a significant PR hiccup from the SPGA.
When it comes to investors, and I’ve mentioned this several times in this newsletter, there is a lack of disclosure from investors (not all) and people with a vested interest in seeing a certain product popularized.