A Whirlwind Week
The dissolution of ESPN Bet and DraftKings prediction market entry dominated last week's news cycle, so today's newsletter leads off with the stories that may have fallen through the cracks.
The Bulletin Board
THE LEDE: Catching up after a wild couple of weeks.
NEWS: Is a sports betting tax hike coming in Pennsylvania?
VIEWS: Two well-timed interviews with FanDuel and DraftKings CEOs.
AROUND the WATERCOOLER: Robinhood’s PM volume + dealing with pros.
STRAY THOUGHTS: Another installment of: You can’t do everything.
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The Lede: All the Stories You May Have Missed
Today’s “Lede” is my usual roundup of gambling news, because in a few hours, I’ll be sending a feature column with my thoughts on a new contagion that has taken hold of the industry: Prediction Market Derangement Syndrome.
New York bill would prohibit prediction markets [Daniel Wallach, X]: A new bill from Assemblyman Clyde Vanel, A9251, would prohibit prediction markets from offering sporting events, as well as “ban market makers, require RG safeguards, and raise minimum age to 21. Would empower AG to impose $50K/violation and $1m/day civil penalties and obtain 2x disgorgement of profits.” However, as Attorney Andrew Kim noted, the bill is likely to go nowhere and would face the preemption challenge from Kalshi and others.
NCAAB hit with more integrity concerns [ESPN]: In the wake of the NBA betting scandal, the NCAA has announced, “Six former men’s college basketball players at three schools -- New Orleans, Mississippi Valley State and Arizona State -- participated in gambling schemes that included game manipulation or sharing information with known bettors.” Per ESPN, “The NCAA also found text messages on [Dyquavian] Short’s phone in which he and [Dae Dae] Hunter discussed receiving $5,000 and spoke with a known bettor on Jan. 20, 2025, the day of a game against Northwestern State.” This is far from the first betting probe into college basketball and is unlikely to be the last, given that the NCAA recently said it is investigating roughly 30 players.
Massachusetts to hold hearing on online casino bill [Hearing Details]: As STTP reported last month, the Massachusetts Joint Committee on Economic Development and Emerging Technologies will hold a hearing on Thursday that will include discussions on the state’s online casino bills. I spoke with Rep. David Muradian, the sponsor of one of the bills on my most recent podcast.
Wisconsin committee advances mobile sports betting bill [Sports Betting Dime]: Despite objections from the Sports Betting Alliance during a recent hearing, the Wisconsin Senate Committee on Agriculture and Revenue approved Sen. Howard L. Marklein’s tribal-backed mobile sports betting bill, SB 592, in a 5-3 vote during an executive session.
Cleveland Guardians pitchers indicted on betting charges [Jeff Passan, X; CBS Sports]: “BREAKING: Cleveland Guardians pitchers Emmanuel Clase and Luis Ortiz have been indicted by prosecutors in Brooklyn on a host of charges related to a scheme to rig bets on pitches thrown in MLB games. Ortiz was arrested in Boston earlier today. Clase is not currently in custody.” Previous STTP coverage of Clase and Ortiz, as well as recent thoughts on betting integrity concerns.
Kevin Mullally resigns as top UAE gaming regulator [LinkedIn]: After two years leading the UAE’s General Commercial Gaming Regulatory Authority (GCGRA) as CEO. The former VP of Government Relations and General Counsel of Gaming Laboratories International cited family reasons for his departure: “Following a recent trip home to the United States, I realized I must prioritize family over my profession at this stage of my life.” Mullally also said, “Together, we built an efficient, modern regulatory framework that upholds the highest standards of integrity and consumer protection while encouraging and enabling innovative gaming technology… I will continue to support the Authority as it completes this important transition and as the regulatory structure we created realizes its full potential.”
Argentina restricts gambling advertisements [SBC News]: Argentina Resolution 446/2025 mandates that all “gambling advertisements must be concise, factual and limited to essential information, avoiding any exaggerated or misleading claims. All advertisements are now required to include two mandatory warnings: ‘Compulsive gambling is harmful to your health’ and ‘For +18 customers.’ These warnings must appear in the lower section of the advertisement, using a minimum font size of four millimeters and accounting for at least 5% of the total height of the ad.” The changes must be in place by November 30.
Minnesota AG sends C&D letters to “illegal” gambling operators [Press Release]: “Minnesota Attorney General Keith Ellison announced today that he has sent letters to 14 operators of illegal gambling websites, directing them to stop offering online gambling in Minnesota because they may violate Minnesota consumer-protection laws that prohibit deceptive, fraudulent, unfair, or unconscionable practices.” Among the recipients are several prominent offshore sportsbooks and sweepstakes operators.
Pennsylvania is also looking at regulating skill games [Casino Reports]: On a parallel (potentially crossing) track to the possible sports betting tax increase, “Pennsylvania’s unregulated skill-based games could be on their way out, sources tell Casino Reports. As the Pennsylvania state legislature and Gov. Josh Shapiro scramble to get a budget in place before the holidays, one proposal would eliminate at least half of the state’s gray-market skill-based games and pull the remaining 40,000 into a regulatory structure.”
Kambi’s OLG changeover pushed back to Q1 2026 [Canadian Gaming Business]: In February, Ontario Lottery and Gaming (OLG) announced it was shifting its sports betting platform to Kambi. At the time, the change was slated for H2 2025, and later pushed back to December. Now it will be even longer. “On a Nov. 5 earnings call, Kambi chief executive Werner Becher admitted things were taking longer than hoped. “Our planned launch with Ontario Lottery is now likely to take place in Q1 2026,” said the CEO. “It is on the Ontario Lottery to decide, but we expect the launch now in early 2026.”
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News: Will Pennsylvania Raise Taxes on Sportsbooks?
Pennsylvania is the latest state considering a higher tax rate on online gambling operators, and the effort appears to be serious, prompting sportsbooks and online casino operators to boost their influence the old-fashioned way: through political contributions.
According to Legal Sports Report:
“A group of ‘major’ sports betting and online casino operators concerned that Pennsylvania gaming taxes could rise are setting aside millions for next year’s midterm elections, sources tell Legal Sports Report.
“The operators intend to form a super PAC, which will let the group openly support politicians and causes throughout the election season. It will launch with $10 million in initial funding.”
Thus far, efforts to fend off tax increases have been mixed. Recent efforts in Wyoming, North Carolina, and Indiana came up short. Still, since 2023, tax burdens have increased 12 times in eight states:
Ohio (2023): Doubled its tax rate from 10% to 20% in 2023.
Tennessee (2023): Shifted from a 20% revenue tax to a 1.85% handle tax.
Illinois (2024): Shifted from a flat 15% rate to a tiered tax rate of 25-40% in 2024.
Louisiana (2024): Reduced the amount of promotional spending that gaming operators can deduct from their tax obligations.
Colorado (2024): Imposed a phased reduction on the amount of promotional spending that sports betting operators can deduct from their taxable revenue.
Maryland (2024): Decreased the allowable deductions for promotional spending by gaming operators.
Virginia (2024): Reduced the amount of promotional spending deductions for sports betting operators.
Maryland (2025): Increased the tax on mobile sports betting from 15% to 20%.
Louisiana (2025): Bumped its tax rate from 15% to 21.5%.
New Jersey (2025): An across-the-board (casino, sports, DFS) rate increase to 19.75%.
Illinois (2025): Added a $.25 per wager fee on the first 20 million wagers, $.50 thereafter.
Colorado (2025): passed a bill that sunsets promo bet deductions.
As STTP has repeatedly noted, taxes on industries like gambling only move in one direction.
Views: InGame Lands Interviews With DK and FD CEOs
InGame scored two important and timely interviews with DraftKings CEO Jason Robins and FanDuel CEO Amy Howe, gaining their insights on prediction markets and the rapidly evolving gambling landscape (which both companies have helped usher in).
In his interview with InGame, Robins explained that DraftKings’ move into prediction markets is a strategic gamble, balancing the risk of missing out on a potential boom with the possibility of it becoming a long-term portfolio staple. He highlighted uncertainties, such as ongoing legal battles and future regulations, emphasizing a measured approach grounded in the idea of competing aggressively but investing cautiously until more data is available on customer acquisition and value.
Robins on DraftKings’ strategic approach to entering prediction markets:
“We have to make sure we don’t miss the boat and that we capitalize if the opportunity is there. But we also have to consider that this could be something that’s around for a long time and an important part of our overall portfolio.”
Robins on the inevitability of betting and the value of legalization:
“We’ve had some form of betting since the beginning of time. It’s not going away. The choice is whether it’s done safely, with tax revenue and oversight, or whether it’s run by criminals with no rules or protections. Those are the two choices.”
In her interview, Howe explained FanDuel’s January 2025 partnership with CME Group, which enables the launch of prediction markets while allowing adaptability to regulatory changes. She emphasized giving the company “flexibility to pivot” based on the environment, deciding on products like sports event contracts as regulations evolve. However, FanDuel’s primary goal remains expanding legal sports betting access to the remaining 50% of the US without it.
Howe on FanDuel’s prediction market partnership with CME and adapting to include sports event contracts amid regulatory uncertainties:
“We’ll give ourselves the flexibility to be able to pivot based on how we see the regulatory environment.”
Howe on how prediction markets could drive more states to legalize or expand sports betting to secure revenue.
“I think, to an extent, one of the potential benefits of the rise of prediction markets is that it actually puts more pressure on both the states that aren’t legal, but also the states that have legalized because they’re missing out on that revenue as well.”
I highly recommend giving both interviews a full read.
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Around the Watercooler
Social media conversations, rumors, and gossip.
I have two Robinhood stories to share with you today.
First, Robinhood is performing very well on the prediction market front, with CEO Vlad Tenev stating that the company traded 2.3 billion event contracts in Q3 and 2.5 billion in October alone — each contract is worth $0.01.
During the company’s Q3 earnings call, Tenev said:
“I think one of the advantages we have entering any market is that we have distribution, we have lots of customers. There are 26 million funded accounts in the US that are trading and using us for all sorts of things.
“My feeling is that there’s going to be a lot of entrants into the space. And in that world, different DCMs and markets will compete for who will offer the lowest cost. And our power will be in our distribution. We’re the only ones who have the power of our traders being able to trade not only prediction markets but crypto, equities, futures. And there are advantages of everything being in one place across one simple, easy-to-use platform.”
Like sportsbooks, it looks like Robinhood also limits users who do well:
Stray Thoughts
When our martial arts school relocated to a larger space (from 1,800 to 6,000 sq. ft.), we had multiple rooms we wanted to utilize. We tried adding a whole bunch of things all at once, including offering it to outside people looking for a space to hold group fitness or wellness-type classes. Nothing ever materialized from these things. We were wasting a lot of our time (which was also distracting from our main product) and getting next to nothing out of it.
So we pulled back. We reset. We let it sit for a couple of months.
Over time, we’ve come to utilize the space more and more, not by adding to it, but by understanding the best uses that fit within what we already offer.
We had a little bit of FOMO, but what we actually needed was patience and reflection on who we are and how the space could be best utilized to improve our core business.
Put in gambling industry terms. Don’t launch a sportsbook because everyone else is, and don’t jump into prediction markets unless you have a clear understanding of how it will interact with your core business.
A steakhouse needs a damn good reason to add tacos to the menu other than ‘a lot of people like tacos.’