The Bulletin Board
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.
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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:
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?
What steps has FanDuel taken to monitor interactions between managers and VIPs to ensure that managers are not offering predatory offers to problem gamblers?
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?
Does FanDuel ever target VIP promotions and perks to bettors who are on a losing streak or appear to be cutting back on wagering?
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?
Does FanDuel ever coach or train its VIP managers to develop personal relationships with their clients in order to encourage more gambling?
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?
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.