And Another One Gone
The Nevada Council on Problem Gambling is withdrawing from the National Council on Problem Gambling, citing the organization's acceptance of Kalshi to its ranks.
The Bulletin Board
THE LEDE: Nevada Council on Problem Gambling severs ties with the NCPG.
ROUNDUP: A look at the stories you may have missed.
VIEWS: Is there a good definition for gambling? Yes and no.
QUICK HITTER: Alabama lawmaker talks gambling expansion.
AROUND the WATERCOOLER: Prediction markets (and polls) miss big in WI.
STRAY THOUGHTS: Tough, straightforward questions.
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The Lede: Another State Cuts Ties With the NCPG
Editor's Note: This entry originally identified the Nevada Gaming Control Board, not the Nevada Council on Problem Gambling as withdrawing from the NCPG.
The Nevada Council on Problem Gambling Board is cutting ties with the National Council on Problem Gambling. The Nevada Council confirmed to the Nevada Current that it “intends to formally sever ties this month with the National Council on Problem Gambling over the latter’s partnership with Kalshi.”
This is the second state to take such an action. In July, the Michigan Gaming Control Board sent a letter to the NCPG saying it was withdrawing its membership:
“Accordingly, MGCB is formally withdrawing its membership from NCPG. Please remove all references to the MGCB’s membership or affiliation with NCPG immediately. Additionally, MGCB employees will no longer serve on any board or committee of NCPG and will no longer attend any NCPG events, including the annual conference.
“Finally, please note the MGCB is cancelling its paid sponsorship for the conference scheduled at the end of July. We will follow up separately to address any steps necessary to ensure all references to MGCB sponsorship are removed.
“I regret that this action is necessary but trust you understand the MGCB’s need to ensure that it is not associated with organizations that are affiliated with companies engaged in illegal gambling.”
As I noted in my July newsletter entry on the MGCB’s withdrawal from the NCPG, the NCPG’s decision to onboard and create a new Financial Services & Trading Membership Subcategory for Kalshi (after a $2 million annual commitment) hasn’t sat well within the industry.
Nor was this hard to see (at least it was clearly visible to me) as soon as Kalshi joined earlier this year:
“My gripe isn’t with Kalshi joining, it’s the way the NCPG let it join.
“The NCPG was long viewed as the most credible voice in responsible gaming. In recent years, however, it has increasingly appeared to prioritize funding. That has led to accusations that it has created pathways for well-funded organizations to reduce scrutiny.
“The NCPG created a special category for Kalshi, and said nothing about the company’s letter to Congress where Kalshi highlighted its NCPG membership (the proverbial ‘get-out-of-jail-free-card’ I warned about) all the while, referring to it as ‘responsible trading.’
“And more recently, we have the NCPG releasing survey results on prediction markets (curious timing), where the group seemed hesitant to call prediction markets gambling in the press release.”
And if we’re being honest, some of these states may have been looking for a way out, particularly given the NCPG’s struggles to remain relevant after the departure of longtime executive director Keith Whyte, who was seen as the NCPG, and much of its credibility left with him.
As I wrote in May: “The NCPG used to be the gold standard on this front, until longtime executive director Keith Whyte parted ways with the organization in January 2025.”
The question I have is, who is going to step in and step up and assume the gold standard mantle? As always, feel free to shoot me an email.
Roundup: So Much News; So Little Newsletter Space
France looks to add online gambling loss-limits for young adults [SBC News]: A whistle-to-whistle advertising ban failed, but French politicians are considering restricting online gambling in several ways through a bill that “seeks to modernize oversight and financial controls over sports leagues, introduce new governance rules for professional football, and strengthen enforcement against audiovisual piracy.” Per Jake Pollard, “The discussions have also cleared the way for the introduction of loss limits for 18-to-25 year olds.”
VGW’s LuckyLand Slots is exiting the US [Covers]: “Sweepstakes casino operator Virtual Gaming Worlds (VGW) is permanently closing its North America-facing brand, LuckyLand Slots, on Sept. 14, ending an eight-year run for one of the most recognized names in the sweepstakes casino industry that was available in 44 states.” As Covers noted, “The shutdown also arrives during a turbulent stretch for VGW. Founder Laurence Escalante stepped down as CEO and executive chairman in July after facing criminal charges in Australia related to domestic violence and drug offenses.”
Underdog appoints former Kalshi exec as Director of Markets [X]: Underdog [a newsletter sponsor] has appointed Noah Zingler-Sterling, the former Head of Operations at Kalshi, who went on to cofound a prediction market venture fund originally 5c(c) Capital, later rebranded UFO Holdings. As Front Office Sports’ Ben Horney tweeted, “Kalshi’s former head of operations who launched a $35m prediction market industry-focused fund has joined Underdog, weeks after its sale to IG Group. Polymarket’s Shayne Coplan, Kalshi’s Tarek Mansour, and Novig’s Jacob Fortinsky are among those who agreed to invest in his fund.”
CFTC releases advisory on Self-Certification of Incentive Programs [CFTC]: “The Commodity Futures Trading Commission’s Division of Market Oversight today issued an advisory reminding designated contract markets of their regulatory obligations when submitting self-certifications for market-maker, liquidity, trading, or incentive programs under CFTC Regulations 40.5 and 40.6. This advisory addresses concerns regarding an increasing number of incentive‑program rule filings submitted under CFTC Regulation 40.6(a)—particularly those relating to event contract products—that contain procedural or substantive deficiencies.”
Grandstand rolls out debit card for gamblers [Press Release]: Newly branded Grandstand (nee Gambling.com Group) “Announced the public launch of Rollcard, a Visa debit card purpose-built for high rollers, including sports bettors, casino players and prediction market traders. Rollcard is a high-limit debit card linked to a dedicated deposit account that keeps a player’s bankroll separate from their everyday finances, offers cashback rewards on qualifying spend, enables high transaction limits, and adds security through the backing of Visa’s global payment network.” STTP Note: The first company to offer such a product is former newsletter sponsor Edge Markets. You can learn more about Edge Markets and the Edge Boost Card in my previous podcasts with CEO Seni Thomas (here and here), as well as its recent fundraising and launch of a dedicated banking platform for market makers for prediction markets.
Quote of the Week: “I do think predictions markets are feeding into a more growing narrative of how much is too much in terms of gaming.” ~ Oliver Barie, Government Affairs Director for the National Association Against iGaming (Oliver was a guest on the Straight to the Point Talking Shop Podcast in February).
Views: The Question of Our Time: What Is Gambling?
Is this the perfect definition of gambling?
While this is specifically looking at beatable games like poker, sports betting, and prediction markets, there is a larger lesson. If the noise (volatility) is much larger than the signal (EV), you’re gambling.
One thing most people overlook is standard deviation, or volatility.
There’s a famous MIT lecture by Professor John Tsitsiklis (you can find a bunch of these lectures here) about coin flips, where you start with $10,000 and flip a coin 100 times: heads produces a 50% gain and tails a 40% loss, or a 5% expected value per flip, which should result in your $10,000 becoming $1.3 million; the veritable license to print money.
But here’s what really happens.
When volatility is high, the growth rate you actually experience is dragged down by about half the variance, so most people will end far below that average (the median return in this experiment is $52).
Only 13.8% of participants in this experiment would finish the 100 flips with at least their initial $10,000 stake.
A tiny number of people will get extremely lucky and pull the overall average up — about 2.8% of people will end up with $100,000-$1 million, and an extremely lucky group of 1.8% of people will get over $1 million.
When we look at gambling, it gets even wilder: Slot machines pay out somewhere in the neighborhood of 90-95%, but how many times does someone insert $100 and walk away with $90, or any amount near their initial stake?
The vast majority of people leave with far less (often $0 or a small fraction of what they put in), while a very small number of players hit huge jackpots and walk away with huge paydays. Those rare huge wins are what push the overall average up to 90–95%.
But in a low variance game like blackjack, the distribution curve is very different. Starting with $100, and playing $5 a hand for 50 hands would result in 85% of people ending with $50-$150.
As Professor Tsitsiklis puts it, “The average of a function of a random variable, in general, is not the same as the function of the average… in general, you cannot reason on the average.”
Quick Hitter: AL Lawmaker Questions Gambling Expansion
Alabama is one of several states to keep an eye on for gambling expansions, but at least one prominent lawmaker isn’t fully on board.
State Sen. Sam Givhan told Yellow Hammer News that while many people favor the authorization of a lottery in Alabama (one of five states without lottery products), he’s less sure about casinos and other expansions:
“People want a lottery. They don’t want the casinos... I mean, there’s no way if somebody tried to produce a constitutional amendment that said we want to do these bingo parlors… or full-blown casinos and we want to do this and that without being connected with a lottery, there’s no way it ever gets through the Legislature.”
Givhan was skeptical of the idea that legalization is the answer, and isn’t buying the ‘we have to broaden gambling to control gambling,’ argument. “Why don’t we just enforce the laws we have on the books?” Givhan said. “There are ways we could come up with a task force… but that’s not ever part of the equation. It’s always no no no no. We got to expand gambling.”
Around the Watercooler
Social media conversations, rumors, and gossip.
The Democratic primary for governor of Wisconsin shows the fallibility of the “truth machines” narrative.
Notice the candidates not-named Francesca Hong were trading at less than 5% on Polymarket (Substack allows me to embed Polymarket odds) until the ballots started being counted:
In short: Prediction markets miss again (and so did the polls, which had Francesca Hong winning by 20 points). And prediction market naysayers are having a field day with it:
Stray Thoughts
This is a wild interview, and I’m actually pretty surprised he would agree to this interview given the company’s current legal battles — I’m just not seeing the upside for Kalshi here.