Are You Threatening Me?
Federal threats to the online gambling industry loom large in 2025 and the threats are becoming harder and harder to ignore.
Straight to the Point has been sounding the federal alarm klaxon since 2018 — five years before the launch of the Straight to the Point newsletter.
It seems like the rest of the industry is beginning to catch up.
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In its Big Predictions for 2025 flash note, Eilers & Krejcik Gaming (a newsletter sponsor) warned of an elevated federal risk, writing:
“Whether it’s a potential revisiting of the OLC Wire Act opinion, an FTC investigation of alleged anti-competitive practices, or the CFTC clearing the path for Polymarket to compete in the betting space, the regulated online gambling industry has more long-tail threats at the federal level than at any time in recent memory.”
Regulus Partners recently wrote:
“A newfound inability to clearly define gambling due to ‘DFS 2.0’, casino-led sweepstakes, and now especially sports CFDs is putting considerable strain on the state-by-state approach, in our view, and gives the Federal government the perfect excuse to intervene – the question is, will a Trump-Republican government take it?”
Regulus points to the Deceptive Mail Prevention and Enforcement Act of 1999 as the possible path a “let’s cut regulatory red tape” Trump administration could explore, as it doesn’t trample states’ rights and aligns with the Elon Musk-Vivek Ramaswany DOGE mission.
Per Regulus:
“The US Congress could amend the DMPEA to clarify two further sweepstakes requirements to align what could be perceived as the spirit and the letter of the law:
all customers must be able to enter a sweepstake contest for the same prize at the same time, thereby removing the time utility of purchase to play (eg, you can buy but you have to wait for a postal delivery, or you can play for free immediately)
sweepstakes prizes cannot be linked to gambling to remove what can be seen as a circular reference which allows social casino to offer a real money payout.
Federal Threats, Let Me Count the Ways
I often mention the inevitability of federal action, but as I wrote in an article for Casino Reports, inevitable doesn’t mean immediate. “Inevitable could be this year, next year, five years, or 20 years from now.”
That’s how the federal government works.
But if you’re looking for warning signs, look no further than the numerous tentacles the federal government is currently probing the gambling industry with.
As my friend Richard Schuetz often says, even the most minor federal action (even if it’s an industry ask) is the proverbial camel’s nose. I’ll divide the federal government's current interest in gambling into two categories: significant and minor threats.
Significant Threats:
Minor Threats (that could open the door to something more extensive):
The GRIT Act and the industry’s desire to end the federal excise tax
The Department of Interior’s new tribal compact rules and the hub-and-spoke model
Classifying problem gambling as a coverable mental health disorder
A Looming Existential Threat
As EKG cautioned, there is the possibility of (yet another) rewriting of the Wire Act by the Department of Justice Office of Legal Counsel.
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