All About The Sports
Are prediction markets reliant on sports? that's a reasonable question considering 75% of Kalshi's trading volume over the weekend occurred in its sports markets.
The Bulletin Board
THE LEDE: How reliant on sports are prediction markets?
BEYOND the HEADLINE: More news on the Kalshi front.
ROUNDUP: Antar loses appeal; Kindbridge launches new initiative; New MGCB chair; RI takes a mulligan on gambling age bill.
NEWS: Breaking down Pennsylvania’s entry into interstate online poker.
NEWS: Louisiana bill increasing sports betting tax rate passes committee.
AROUND the WATERCOOLER: The Simpsons take on sports betting.
STRAY THOUGHTS: Some very nice STTP mentions.
SPONSOR’S MESSAGE - Underdog: the most innovative company in sports gaming.
At Underdog we use our own tech stack to create the industry’s most popular games, designing products specifically for the American sports fan.
Join us as we build the future of sports gaming.
Visit: https://underdogfantasy.com/careers
The Lede: How Much Do Prediction Markets Need Sports?
Kalshi planted its flag in the US through election markets, but elections only occur every two years, and the big kahuna election takes place on an Olympic-like four-year cycle.
As we saw in November, presidential elections are a tentpole event for prediction markets, but they also need something to fill the space between US elections, and that something isn’t Canadian elections or the price of Bitcoin or gas; as Dustin Gouker noted in the LinkedIn post below, it’s sports.
As Gouker said in his Closing Line newsletter, “The graph may seem obvious, but I am also not sure people are really grasping that after the 2024 US elections, there wasn’t necessarily a ton of stuff at Kalshi that can drive volume (outside of the Oscars)… It’s [sports] one of the few (only?) levers it can pull to scale the business and volume/velocity outside of election cycles.”
Alfonso Straffon has been heavily involved in this discussion, previously noted that without sports, the prediction market business model may not be overly viable, as I previously reported in STTP.
I’d also point out that its sports trading volume outside of tentpole events like March Madness and The Masters isn’t exactly a world beater at this point. Of course, I’d also note that Kalshi has been trading sports contracts for about three months and has already made a big splash, and has an extremely high ceiling.
Beyond the Headline: In Other Kalshi News
As usual, there is more news on the prediction market front than I can fit into the newsletter, so here are some bit-sized blasts:
Michigan regulators file letter with CFTC [Event Horizon]: “The Michigan Gaming Control Board filed a letter with the Commodity Futures Trading Commission on Tuesday to express concerns with sports event contracts via prediction markets platforms like Kalshi. The gambling regulator stopped short of saying that the practice was illegal in Michigan, however.”
Another point of interest from Event Horizon: “Finally, it’s interesting that the CFTC canceled a planned roundtable on prediction markets, yet the commission is continuing to post comments on a page dedicated to said roundtable.” STTP Thoughts: STTP is aware of other submissions sent to the CFTC that are yet to be published.
Andrew Kim breaks down Kalshi’s legal victory in New Jersey [Event Horizon]: Andrew Kim (a recent STTP Podcast guest) penned a guest column at Event Horizon where he called Kalshi’s New Jersey legal victory “a win, to be sure — but a tentative one, at that.” Kim went on to say, “I’ll not mince words: I think the decision is poorly reasoned, and I don’t know if it’ll hold up on appeal.” He then lays out four reasons why, which you can follow the link to see.
BetMGM CEO Adam Greenblatt during the company’s Q1 earnings call: “In our existing OSB states, it represents a degree of risk, a small risk only because the markets that prediction markets serve would be lower-margin for operators… There would be no impediment to sports betting operators participating in that market. So we wouldn’t lose that business entirely.”
Roundup: Antar Loses Appeal; Kindbridge’s New Initiative; New MGCB Chair; RI Revote on Gambling Age
Appeals Court dismisses Antar lawsuit against MGM [Casino Reports]: The Third Circuit Court of Appeals “upheld a lower court’s decision to dismiss Sam Antar’s claims against BetMGM, Borgata Hotel Casino and Spa, and MGM Resorts International. Antar, an heir to the “Crazy Eddie” consumer electronics company fortune, had alleged that casino employees engaged in unconscionable business practices by offering him numerous bonuses and incentives despite recognizing his gambling addiction.”
Kindbridge announces financial literacy initiative [CDC Gaming Reports]: Kindbridge has launched a “national initiative to confront gambling-related financial harm as a public health and financial stability issue. This work builds on the foundation of responsible gambling while expanding it into a broader public health approach—one that includes financial literacy, system-wide collaboration, and practical tools to intervene early and prevent more severe outcomes.”
New MGCB Chairman announced [CDC Gaming Reports]: “Michigan Gaming Control Board Executive Director Henry Williams has announced that Jim Ananich will serve as the new chairman of the Michigan Gaming Control Board. Ananich, appointed by Governor Gretchen Whitmer, succeeds Linda Forte, whose term has expired.”
Rhode Island bill would criminalize online gambling by anyone under 21 [Providence Journal]: The Rhode Island House Judiciary Committee will revote on a bill that would make it illegal for anyone under 21 to gamble online. During its first failed vote, opponents noted that because Rhode Island casinos are 18+, an online bettor could “end up with a criminal record for doing the same on their phones – without even knowing they were breaking the law.”
News: LA Bill Would Increase Sports Betting Tax Rate
A bill filed earlier this month in Louisiana, HB 639, would increase the tax rate on sports betting from 15% to 32.5%, which is the same rate as video draw poker devices at qualified truck stop facilities. The House Appropriations Committee approved the measure on Monday in a 20-1 vote.
The bill could gain support as it makes the following changes to revenue distribution:
25% to support in-state colleges (HB 639 creates the Supporting Programs, Opportunities, Resources, and Teams Fund)
3% to La. Postsecondary Inclusive Education Fund
Remainder to State General Fund
However, it also faces a fraught road. As reported by SBC Americas, the sports betting bill’s fate is connected to a separate bill, HB 594, which would establish a flat tax rate on insurance premiums.
Louisiana was one of several states that considered raising the tax rate on sports betting operators last year. The failed 2024 effort sought to bump the tax rate to 51%.
News: US Online Poker Gets a Big Boost
In an increasingly rare instance of positive news, Pennsylvania joined the Multi-State Internet Gaming Association (MSIGA) on Monday.
Pennsylvania’s entry allows operators to pool their online poker players across MSIGA states, ushering in a new era of online poker in the US, with significant liquidity gains, enhanced game selection, and increased tournament guarantees and prize pools.
An intriguing part of the US online poker landscape is the competitiveness (unlike what we are seeing for sports betting):
Nowhere is the impact of Pennsylvania’s MSIGA entry more evident than in WSOP.com tournaments.
In 2024, when events were pooled across Nevada, New Jersey, and Michigan, the 30-event online WSOP schedule guaranteed $3 million. In 2025, with the addition of Pennsylvania, the total guarantee across 30 events jumped to $5.5 million.
So, what do the current interstate online poker networks look like?
PokerStars: New Jersey and Michigan (PokerStars is live in PA) - 19.5 million residents
BetMGM/Borgata/Partypoker: New Jersey, Michigan, and Pennsylvania - 32.5 million residents
WSOP.com: Nevada, New Jersey, Michigan, and Pennsylvania - 35.8 million residents
BetRivers Poker: Pennsylvania - 13 million residents
Future Expansion
On the state front, West Virginia is already part of the MSIGA, but no operators have launched. Delaware is also an MSIGA state, but RSI, the only online operator, has yet to launch its poker product there. The Connecticut legislature is advancing a bill that would allow the state to join.
PokerStars is likely to connect its Pennsylvania player pool with Michigan and New Jersey in the near future. However, due to a “tainted asset” clause in Nevada, the company is prohibited from launching there.
BetMGM has been requesting waiver extensions from Nevada regulators for several years. There is reason to believe the expanding interstate network will be the final nudge it needs to launch in Nevada. On the other hand, Nevada is likely the sharkiest state in terms of professional poker players; keeping those players at a competitor’s network could make sense.
Regarding the final entrant, BetRivers is currently live in Pennsylvania only. Still, it is capable of launching in Michigan, New Jersey, and West Virginia, as well as Delaware, where it has exclusive access.
As first reported by Pokerfuse.com, the company announced: “Rush Street Interactive is preparing to launch BetRivers Poker in multiple states following Pennsylvania’s entry into the Multi-State Internet Gaming Agreement (MSIGA) and approval of shared player liquidity.” The company didn’t offer specifics on when state rollouts of its online poker platform or interstate pooling would start, but according to Pokerfuse, “Behind the scenes, BetRivers is actively working toward expansion in New Jersey and Michigan.”
Around the Watercooler
Social media conversations, rumors, and gossip.
The Simpsons tackle sports betting. I highly recommend Jeff Edelstein’s column at InGame on the recent episode.
This isn’t the first time gambling has been a topic on The Simpsons:
"$pringfield (Or, How I Learned to Stop Worrying and Love Legalized Gambling)" (Season 5, Episode 10): Springfield legalizes gambling, leading to the opening of Mr. Burns' casino. Homer becomes a blackjack dealer, and Marge develops a gambling addiction.
"Viva Ned Flanders" (Season 10, Episode 10): Homer and Ned Flanders take a spontaneous trip to Las Vegas, where they gamble and marry cocktail waitresses after a night of heavy drinking.
"Bart to the Future" (Season 11, Episode 17): Bart gets a glimpse of his future, including Native American tribes operating a tribal casino.
Stray Thoughts
Straight to the Point got a couple of nice mentions this week.
First was this heartwarming LinkedIn post from Keith Whyte, the former executive director of the NCPG, who is now running his own consulting business, Safer Gambling Strategies. You can reach Keith on LinkedIn.
You can also check out my podcast with Keith here:
Second, the newsletter is now listed in the resources section at SeventySix Capital, which is an excellent resource for anyone seeking to stay up-to-date on the space.
