A California Catastrophe

California sports betting deal hits a snag after tribes take issue with reporting. Trust falters, talks slow, but all’s not lost—so get your popcorn ready.

Apr 07, 2025

THE LEDE: A tentative deal for California sports betting goes sideways.
PREDICTION MARKET NEWS: States continue to take action as CFTC Roundtable approaches. Plus plenty of other news.
NEWS: 11 states have introduced sweepstakes prohibition bills.
AROUND the WATERCOOLER: Kalshi is a serious player in the sports market
STRAY THOUGHTS: Kalshi CEO’s bold proclamation.

SPONSOR’S MESSAGE -Light & Wonder, Inc. is the leading cross-platform global games company. Through our three unique, yet highly complementary businesses, we deliver unforgettable experiences by combining the exceptional talents of our 6,000+ member team, with a deep understanding of our customers and players. We create immersive content that forges lasting connections with players, wherever they choose to engage.

At Light & Wonder, it’s all about the games. The Company is committed to the highest standards of integrity, from promoting player responsibility to implementing sustainable practices.

Learn more

The Lede: California Sports Betting Deal Jumps the Gun

Did good reporting undo two years of tribal-commercial efforts? It certainly appears so, considering the series of events at the Indian Gaming Tradeshow & Conference last week.

After Jill Dorson reported on a roundtable discussion that was billed as a step forward for tribal-commerical relations in California, the fit hit the shan. Tribes and the Sports Betting Alliance went into damage control, with a series of clarifications, press releases, and responses calling into question how much progress has been made in mending fences after a very contentious 2022 election cycle that pitted California tribes against commercial operators.

Here’s how things went down last week:

The Sports Betting Alliance (SBA) invited Veteran journalist Jill Dorson to the roundtable. The roundtable was on the record, and Dorson dutifully reported on what was said and the slides presented.
Following her coverage, the SBA issued a clarification, noting that the logos (of the four SBA members) “were simply a function of who the SBA represents. The slide was not meant to be an indication of the full market.”
Dorson and Casino Reports edited the article to reflect the SBA’s statement.
The California Nations Indian Gaming Association (CNIGA) and the Tribal Alliance of Sovereign Indian Nations (TASIN) issued a joint statement on Wednesday criticizing the SBA for inviting “a reporter into what was intended to be a private roundtable discussion among tribal leaders regarding this controversial issue.” The statement called it a breach of trust, which is already in very short supply following the 2022 ballot fight.
Casino Reports responded to the tribal statement, noting Dorson, “Verbally confirmed that the meeting was on the record and that she could report on it.”

Is this a death blow to efforts? No, not at all.

Does it make a compromise a bit more challenging? Yes. Adam Krejcik of Eilers & Krejcik Gaming (a newsletter sponsor) half-jokingly said, “I truly believe we will see a human being on Mars before we get online casino (in California),” at the conference.

Trust is critical to tribes, and with these talks starting with a heavy dose of skepticism, an already slow path to legalization may have gotten slower. The worst part is, this wasn’t an error or scheming; this was a slight misreading of where the other side thought the process was.

Now it’s on to damage control, with commercial operators needing to once again prove themselves to the tribes.

If you don’t understand the tribal perspective, or what “proving yourself” means to tribes, listen to this four-minute interview with IGA Conference Chair Victor Rocha:

Rocha did post on LinkedIn that he will be sitting down with Kalshi CEO Tarek Mansour in the near future, and I would suggest having an extra supply of popcorn ready for Rocha’s comments after the sitdown.

Prediction Market Updates: 4 States Issue C&Ds, At Least 6 Others Investigating

If you’re following the modern-day saga of prediction markets, there is a smorgasbord of news to catch up on, starting with the states that are, or are considering, taking action against Kalshi et. al.

Nevada: Nevada kicked off the actions against prediction markets earlier this month, issuing a cease-and-desist letter to Kalshi calling its sports and election markets "unlawful in Nevada, unless and until approved as licensed gaming by the Nevada Gaming Commission.” Kalshi has filed a suit against Nevada and New Jersey (STTP coverage and analysis here), and Nevada filed its response late last week — great analysis of Nevada’s filing by Andrew Kim of Goodwin Law.
New Jersey: “The New Jersey Department of Gaming Enforcement has issued cease-and-desist letters to both the prediction markets platform Kalshi and financial platform Robinhood,” per Dustin Gouker’s The Closing Line Substack. Gouker later reported that Robinhood (but not Kalshi) has restricted New Jersey from its March Madness betting options.
Ohio: Ohio Casino Control Commission has also sent Kalsh (as well as Robinhood and Crypto.com) a cease-and-desist letter, and given the three companies until Monday, April 14, 2025, to comply. “The Commission determined the event contracts offered by the companies on sporting events meet the definition of sports gaming under the law, which requires licensure to be legally offered in Ohio,” the OCCC press release states.
Illinois: The Illinois Gaming Board sent Kalshi, Robinhood, and Crypto.com cease-and-desist letters on April 1, 2025 (the letters can be found here). The Kalshi letter reads in part, “The IGB is aware that Kalshi is engaged in sports wagering activity in Illinois over the Internet and on mobile devices. The IGB has neither licensed nor authorized Kalshi to engage in sports wagering activity. Consequently, Kalshi's activity constitutes illegal gambling in violation of Illinois law. Accordingly, Kalshi and anyone affiliated with its operations are directed to cease and desist this illegal activity. Failure to comply may subject Kalshi to civil or criminal penalties.”

The above represent official actions. There are also investigations occurring in several other locales:

In Connecticut: “The gaming division of the Connecticut Department of Consumer Protection has opened an investigation into Kalshi, adding to the list of states that are taking a closer look at the federally regulated prediction market’s products,” Covers.com reports.
In Kansas: James Bain, enforcement attorney for the Kansas Racing and Gaming Commission, told Sports Betting Dime the Commission is “not planning on sending cease-and-desist letters to prediction market platforms” at the moment. The Commission is waiting for the CFTC to weigh in before it makes a decision.
In Louisiana: Per Robert Linnehan, “Chris Hebert, Chairman of the Louisiana Gaming Control Board, says the board is aware of the recent developments regarding sports event prediction markets and is ‘currently assessing the situation.’
In Massachusetts: Secretary of State Bill Galvin has opened an investigation into Robinhood’s sports contracts and issued a subpoena to the firm, Per Reuters. Galvin called the sports markets a “gimmick from a company that’s very good at gimmicks.”
In Washington State: A Barron’s article offhandedly mentions that Washington State is investigating these offerings. Washington State has the strictest online gambling laws in the country, with the mere act of gambling online being a felony. Also, recall that Washington State has seen successful class action suits against social casinos.
In Michigan: The Michigan Gaming Control Board told PlayMichigan that it “currently has investigations open regarding sports prediction markets offered in Michigan by unlicensed entities. These investigations aim to address concerns about consumer protection and ensure that residents of Michigan are safeguarded against potential risks posed by unregulated operators. The MGCB has not issued cease-and-desist letters to such entities at this time.”

Other important developments to be aware of:

Kalshi’s Chief Legal and Regulatory Officer, Elizier Mishory, has accepted a job overseeing DOGE efforts related to the Securities and Exchange Commission (SEC). Kalshi CEO Tarek Mansour confirmed the news on X. The timing is, of course, quite interesting.
Nevada Rep. Dina Titus has gotten involved, sending a letter to the CFTC requesting it to “stay, evaluate, and amend all sports and political event contracts while legal proceedings occur.”
The CFTC Roundtable is penciled in for April 30 (of note, Trump appointee Brian Quintenz, a massive supporter of prediction markets, has yet to be confirmed).
Daniel Wallach has resurfaced old arguments from Quintenz and acting chair Caroline Pham, that indicate Quintenz believes everything should be on the table at prediction markets, while Pham has a more nuanced take.

News: Eleven States Have Filed Anti-Sweeps Bills

Louisiana is the latest state to put a target on the back of sweepstakes gaming operators. With the addition of Louisiana, the number of states that have introduced legislation to ban sweepstakes gaming sites is up to 11 — STTP would note that none of these bills have passed.

Louisiana’s bill, SB 181, would amend Louisiana’s laws to include what the bill calls, “illegal online sweepstakes games”:

“Any game, contest, or promotion that is available on the internet or accessible on a mobile phone, computer terminal, or similar access device that utilizes a dual-currency system of payment allowing the player to exchange the currency for any prize or award or cash or cash equivalents, or any chance to win any prize or award or cash or cash equivalents, and simulates any form of gambling, . . . including . . . the following: (1) Casino-style gaming, such as slot machines, video poker, and table games, including blackjack, roulette, craps, and poker. (2) Lottery games, including draw games, instant win games, keno, and bingo. (3) Sports wagering.”

The bill also grants the Louisiana Gaming Control Board standing to bring civil enforcement actions and impose civil penalties, providing regulators with aoften missing enforcement tool.

As Daniel Wallach notes:

“Critically, the proposed new sweeps ban (and criminal penalties) would apply to basically everybody in the supply chain, including licensees (and employees, officers, and directors), geolocation providers, gaming manufacturers, gaming suppliers, platform providers, promoters, investors, and media affiliates.”

Light & Wonder’s Howard Glaser responded to a LinkedIn post calling Louisiana’s targeted approach “a dagger,” by saying, “We sharpen it up a little more with each bill…”

The Social and Promotional Games Association issued a statement (similar to previous statements), saying it “vehemently opposes Louisiana Senate Bill 181… which recklessly misclassifies legitimate sweepstakes as illegal gambling.”

“This misguided legislation endangers lawful businesses and sends a chilling message to investors, jeopardizing Louisiana’s burgeoning tech sector,” the SPGA says, adding the bill could “unintentionally criminalize loyalty and rewards programs run by some of the most respected brands in the country,” and “discourages venture capital investment potentially stifling the development of emerging technologies, including artificial intelligence.”

The Ten Other Efforts

New Jersey: A bill, A 5196, filed by New Jersey Assemblyman Clinton Calabrese, sought to legalize and regulate sweepstakes as online gambling operators, requiring licensure, oversight, and taxation. It has been replaced by A 5447, which would “prohibit sweepstakes model of wagering” and “establish new penalties for unlawful gambling operations and practices.”
Mississippi: SB 2510, introduced by State Sen. Joey Fillingane, would prohibit sweepstakes online gambling sites. The bill passed the Senate and the House, but the House added language authorizing mobile sports betting, forcing a conference committee, where the legislation died.
Maryland: SB 860 unanimously passed the Senate and is now awaiting action in the House. The bill “proposes the license denial and/or license revocation of any person or entity that supports or promotes the operation of online sweepstakes games,” including suppliers and affiliates.
Connecticut: SB 1235 would ban sweepstakes, lottery courier services, and certain sports wagers. A relatively uneventful hearing in February didn’t result in any action. That said, recent action against High5Games and investigations into prediction markets could spark new interest in legislation.
New York: New York State Sen. Joseph Addabbo Jr. introduced S 5935, a bill prohibiting online sweepstakes casinos. A companion bill, AB 6475, has been introduced by Addabbo’s counterpart in the House, Assemblywoman Carrie Woerner, who chairs the Assembly Racing, Gaming and Wagering Committee. Addabbo’s bill has passed the Senate Racing, Gaming and Wagering Committee and can now be heard on the Senate floor.
Nevada: While not specifically about sweepstakes, SB 256 would forfeit all profits, gains, gross receipts, or other benefits relating to illegal gaming activities, increase criminal penalties, and extend liability outside Nevada’s borders.
Arkansas: An online casino legalization effort, HB1861, in Arkansas would legalize online casinos and, at the same time, prohibit sweepstakes.
Montana: State Sen. Vince Ricci introduced SB 555 during last week's Senate Business, Labor and Economic Affairs committee meeting. The bill amends the definition of online gambling to include “online casinos, by whatever name known, which constitute internet gambling and therefore are prohibited. This includes but is not limited to any platform, website, or application that knowingly transmits or receives gambling information, allows consumers to place a bet or wager using any form of currency, and makes payouts of any form of currency.” 100% free-to-play casinos are exempt.
Florida: Legislation in Florida would extend the state’s prohibition on gambling to include online betting. The bills are SB 1404 and HB 953 — SB 1404 passed the Regulated Industries Committee in an 8-0 vote. The bills broadly define internet gambling and cover operators, vendors, and suppliers, payment processors, and media affiliates in what appears to be an effort to cover sweepstakes gambling sites.
Illinois: A pair of bills in Illinois would prohibit online sweepstakes. SB 1705, sponsored by Sen. Bill Cunningham, “would amend the state’s criminal code to address two key areas: making video sweepstakes machines that are routinely found in jurisdictions that opted out of offering VGT play illegal as well as banning online sweeps.” Rep. Bob Rita’s HB 2879 also targets illegal gaming.

Around the Watercooler

Social media conversations, rumors, and gossip.

Kalshi’s March Madness trading volume is approaching $500 million:

Alex Kane noted that trading volume is not an apples-to-apples comparison for handle, but the number is impressive no matter how you slice it.

March Madness estimates from the AGA, Eilers & Krejcik, Citizens, and Vixio for legal markets came in between $2.6 billion and $3.2 billion. People are using prediction markets even in markets with licensed, regulated sportsbooks that offer more betting options.

As I’ve said several times, I’m not against new products and ideas, we just need to ensure they are appropriately regulated, and not skirting regulated betting norms because they’ve coined a euphemism to mask their similarities to gambling.

Stray Thoughts

Kalshi CEO Tarek Mansour appeared on Strictly VC where he said, “If the CFTC tells us stop, we will absolutely stop, and if they don't, then we won't." (h/t Alfonso Straffon)