Betting Big, Suing Bigger
The city of Baltimore is suing the biggest sportsbooks, alleging predatory practices like deceptive bonuses and VIP programs harm vulnerable residents.
The Bulletin Board
THE LEDE: Baltimore is suing DraftKings and FanDuel for deceptive practices.
ROUNDUP: Kalshi gets two more C&Ds; Delaware sends C&D to VGW; Arkansas iCasino bill is dead; ECGC; Read of the Week.
NEWS: CNIGA Chairman lays out all the threats to tribal gaming.
VIEWS: Alabama’s 2025 gambling expansion effort was over before it started.
AROUND the WATERCOOLER: TYT’s nuanced sports betting take.
STRAY THOUGHTS: Keep fighting.
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The Lede: Baltimore Files Suit Against Sportsbooks for “Deceptive and Unfair Practices”
It’s a strange time to cover the gambling industry.
The city of Baltimore is suing FanDuel and DraftKings, claiming the companies “employ sophisticated data analytics to identify and then exploit players showing signs of problem gambling,” which is exacerbated by bonus offers and VIP programs — the companies are licensed in the state of Maryland and comply with all regulations.
“Rather than accept a robust and profitable market, DraftKings and FanDuel have sought to guarantee their profitability by cheating, hoping to hook, and then ultimately exploit, as many users as possible,” the lawsuit alleges, highlighting bonus bets as the bait used to hook new customers and VIP programs as the net to keep bettors from escaping.
Per the lawsuit:
“First, Defendants get Baltimoreans in the door with the promise of “bonus bets,” or other similarly named promotions, designed to induce Baltimoreans to bet. Their goal is twofold: (a) to get as many people to join their platforms as possible; and (b) to use inducements and the design of their product to hook those new users on gambling.”
The complaint alleges that while seeming straightforward, “to a person reading the large, prominent advertising text, they are governed by complex terms and conditions… These offers contain intricate rules that many users may find difficult to fully comprehend.”
On VIP programs, the lawsuit reads:
“DraftKings’ and FanDuel’s sophisticated loyalty and retention programs enable and reinforce addictive gambling patterns. Industry experts advocate offering loyalty programs and promotions to help strengthen players’ desire to play, leading to “high lifetime value.” While presented as customer service, these retention tactics can make it harder for at-risk players to break problematic gambling cycles by offering escalating rewards and status tied to betting volume.”
Baltimore Mayor Brandon Scott is supportive of the suit, saying:
“These companies are engaging in shady practices, and the people of our city are literally paying the price. DraftKings and FanDuel have specifically targeted our most vulnerable residents — including those struggling with gambling disorders — and have caused significant harm as a result. This lawsuit is a critical step to hold them accountable and protect all Baltimoreans.”
City Solicitor Ebony Thompson with the Baltimore City Department of Law added:
“DraftKings and FanDuel put corporate greed ahead of the well-being of Baltimoreans, getting users hooked to their gambling platforms and then leveraging troves of data to identify, target, and exploit the most vulnerable among them. Their predatory practices have caused significant harm to our community, and we are taking action to hold them accountable and protect our citizens.”
STTP Thoughts: What could become a very intriguing part of this case (or a subsequent one) is discovery. If the case continues and a settlement isn’t reached (those are both huge ifs), discovery would be quite interesting and far more invasive than the current interest in VIP programs from state regulatory bodies.
As former Louisiana Gaming Control Board Chairman Ronnie Jones put it on LinkedIn, “Is this sports betting's Fort Sumter?”
Jones went on to say:
“Long before PASPA was overturned and sports betting proliferated, gaming companies struggled with competing internal organizational elements focused on two conflicting missions—one sought to protect and educate vulnerable gamblers with forward leaning RG programs and a second, sometimes more powerful marketing team focused on bringing more customers into casinos. Finding that balance has been elusive and now with gaming opportunities only a mobile phone away, the challenges have grown considerably.
“I don’t profess to have a solution but as this lawsuit lumbers through what will be a protracted process, if indeed it continues without resolution, depositions and discovery may fuel the contentious debate with no easy solution in sight. Congress will be watching closely. iGaming are you paying attention?”
Roundup: 2 More Prediction Market C&Ds; DE sends C&D to VGW; AR iCasino Dead; ECGC; Read of the Week
Kalshi receives two more cease-and-desist letters: Yesterday’s newsletter is already out-of-date. Montana and Maryland are the latest states to send cease-and-desist letters to Kalshi (actually, Montana’s letter predates New Jersey’s, but we are just finding out about it). That brings the number of states that have sent C&Ds to six, with no end in sight.
Delaware drops the hammer on VGW: (STTP edit: The C&D is old; the news is VGW left the state, h/t to Jessica Welman) Delaware has joined a growing list of states cracking down on sweepstakes operators, sending a cease-and-desist letter to industry titan VGW. Per the press release, “Delaware officials concluded that VGW misrepresented its services as a promotional sweepstakes while enabling players to purchase coins for casino-style games, leading to potential cash winnings. These types of real-money games offered to Delaware residents by an unlicensed entity violate the Delaware Constitution, the Delaware Penal Code, and the Delaware Gaming Competitiveness Act of 2012.”
Arkansas online gambling meets an unceremonious fate: Per Larry Henry, “A bill to legalize online casino gaming in Arkansas was withdrawn and recommended for interim study by the House Judiciary Committee,” as the legislative session comes to a close. The bill emerged late in the session, and while Arkansas is a promising state, the support didn’t exist.
Still time to register for East Coast Gaming Congress: The East Coast Gaming Congress (ECGC) will take place at the Hard Rock Hotel Casino in Atlantic City from April 15-16. ECGC, presented by Spectrum Gaming Group, is the longest-running gaming conference in the US (this is year 28), and as I recently wrote, “ECGC is what I would call an intimate conference. Still, because of its history and location (in Atlantic City), it attracts some of the biggest names in gaming, making it the most slept-on conference, in my opinion,” evidenced by the speaker list.
You can register for ECGC here
Read of the Week: I also highly recommend this column from Michael Pollock, former Managing Director of Spectrum Gaming Group (Pollock recently retired), who writes, “iGaming Success is Not Automatic, but is Achievable,” for Global Gaming Business.
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News: CNIGA Chairman Rings the Tribal Alarm Bell
During a session at last week’s Indian Gaming Tradeshow and Convention titled “Under Siege: The Growing Threats to Tribal Gaming in California,” California Nations Indian Gaming Association (CNIGA) Chairman James Siva issued several stern warnings to tribes. Siva mentioned everything from the Trump administration and Democratic leadership in California to California cardrooms, sweepstakes operators, and prediction markets.
Per reporting from CDC Gaming Report’s Buck Wargo, “Siva said his biggest worries about the Trump administration are the uncertainty about and the alacrity of what they’re doing.”
His criticism of politicians didn’t end there, as he noted even friendly administrations, like California Gov. Gavin Newsom’s, have also put up roadblocks. Siva called Newsom the most pro-tribal governor they’ve ever had, “but under his watch, there have been more compact disputes than any other governor,” per Wargo.
Siva on California Cardrooms: “We continue to see them operate and advertise themselves as casinos,” cutting into tribal exclusivity. Siva also called cardrooms “some of the biggest violators in the state, with multiple FinCEN violations over a number of years.” Siva expressed frustration, saying they keep paying the fines and continue to operate.
STTP Thoughts: The longstanding battle over player-banked games at California cardrooms remains a thorny issue, with SB 549 marking a rare legislative win for tribes in 2024 — a huge story that received minimal coverage. The bill, signed into law last year, gave tribes a narrow window to sue cardrooms for offering games that allegedly infringe on tribal exclusivity—a right previously denied by courts citing sovereign immunity limits. The lawsuits are now underway, but cardrooms have a deep history, a strong lobby, and a lot of political clout. The process could drag out for years. The real question: Will judicial outcomes finally shift the balance, or will cardrooms find new loopholes to exploit? Previous coverage of this complicated topic on STTP: The backstory, Cardroom opposition, Tribal support.
Siva on Sweepstakes: “What they’re doing is illegal gaming, point blank, period.” Siva said tribes would use every means necessary to stamp them out, including going after payment processors. Siva called sweepstakes, “probably the biggest threat we face.”
STTP Thoughts: Sweepstakes operators—marketed as "skill games" or "promotional contests"—are facing nationwide scrutiny (the C&Ds as well as anti-sweeps bills). Tribes see them as blatant illegal gaming, siphoning revenue from tribal casinos. However, enforcement is challenging. Cease-and-desist letters have scared off some operators, but others dig in and are betting on regulatory gray zones persisting. Siva’s threat to target payment processors could be a game-changer, as could laws/regulations targeting affiliates and suppliers. Still, aggressive rhetoric and the numerous levers they can pull haven’t yet translated into clear wins.
Siva on Prediction Markets: “What they’re trying to do is move sports betting under the regulatory authority,” of the CFTC, Siva said. “That would allow online sports betting to go into any jurisdiction, regardless of state law and state constitutions.”
STTP Thoughts: Prediction markets like Kalshi have thrown uncertainty into the usually ordered gambling landscape. If the CFTC greenlights its expansion into sports, it could unleash a wave of online sports betting nationwide that will make the post-PASPA expansion seem quaint by comparison. With prediction markets bypassing state-by-state legalization battles, tribes argue this guts their sovereignty and compacts, potentially flooding markets with unregulated competitors. The legal fight ahead will hinge on whether courts see this as “gaming” or “trading.” California tribes could ally with other gaming stakeholders—like commercial casinos—to amplify their case.
News: Alabama Gambling Expansions Go Up in Smoke
If you blinked, you may have missed a late push to expand gambling in Alabama.
Rumors began swirling last week that lawmakers were engaged in behind-the-scenes talks about gambling expansions — casinos, lottery, and sports betting.
And sure enough, two efforts were introduced, starting with HB 490, sponsored by State Rep. Jeremy Gray, which sought to legalize sports betting and establish the Alabama Gaming Commission. On Thursday, State Sen. Greg Albritton announced a separate plan to authorize online sports betting, a state lottery, and tribal casinos.
Both measures were declared DOA by Senate President Pro Tempore Garland Gudger soon after Albritton’s announcement. “With 12 meeting days remaining in the session, both budgets still awaiting approval, and other important bills and measures demanding focus and attention, the comprehensive gaming bill released today is simply too little, too late, and has too few votes to pass,” Gudger told the Alabama Reflector.
Per Alabama.com, Albritton declared gambling expansions dead for the next 20 years: “We’ve tried everything we can on this bill over the years,” Albritton said. “One thing has been proven is that it doesn’t matter what the bills say, period. If the word ‘gaming’ or ‘gambling’ shows up on the page, it’s a ‘no’ vote.”
In other Alabama gambling news, “The Poarch Creek Indians and the McGregor family announced that the sale of the historic Birmingham Racecourse property was finalized, and the Tribe’s gaming and hotel business, Wind Creek Hospitality, is the official new owner,” per Yellowhammer News.
As STTP mentioned in November 2024, the purchase will have a significant impact on future gambling expansions:
“As I previously noted, the Poarch Band of Creek Indians has hired some high-profile lobbyists to make sure a gambling expansion package doesn’t leave the tribe out in the cold.
“PCI, via Wind Creek Hospitality, is acquiring the Birmingham Racecourse, which currently offers parimutuel and historical horse racing machines. The acquisition makes it much harder for a gambling expansion package to disfavor PCI.”
Around the Watercooler
Social media conversations, rumors, and gossip.
Wait, what is this? A decent sports betting take from outside the industry?
A very interesting segment on The Young Turks about sports betting, which, unlike the mainstream media pieces, had a very nuanced take on the subject. Cenk Uyger, the host of The Young Turks, likely shocked his audience when he said there is no role for the government in determining how and when people bet.
“I’m pro gambling,” Uyger noted, to the surprise of his cohosts.
Uyger called the tactics “a little bit predatory,” but said he doesn’t have a problem with it. Do these guys butter up the top gamblers to get them to gamble more? “Of course!” But Uyger explained his point, saying that land-based casinos have always done this (from Steve Wynn to Sheldon Adelson to Donald Trump) and that whatever rules apply to casinos should apply to online gambling.
Uyger, showing some knowledge of the topic, recalled Sheldon Adelson’s anti-online gambling views.
Cohost Wosny Lambre, also showing some familiarity with the topic, noted that winners get banned (his words, not mine) and that because the margins are so slim in sports betting, they rely on problem gamblers to make money, again, his words not mine. He also noted the addictiveness of phones and the low barrier of entry for mobile betting.
You can watch the entire segment here:
Stray Thoughts
"Fall down seven times, stand up eight." Chinese Proverb
Life is pain… Anyone who says differently is selling something." ~ Westley (Cary Elwes), The Princess Bride
What I’ve learned (am still learning) is that there will always be things outside your control, and you can either let them grab hold and control you or or use them as stepping stones to rise stronger each time.