The Bulletin Board
THE LEDE: A North Jersey casino would be too little, too late.
BEYOND the HEADLINE: Online gambling; good or bad for land-based casinos.
WAY BEYOND the HEADLINE: Cannibalization takes time to rear its head.
NEWS: Catching up on prediction market lawsuits.
QUICK HITTER: Opposition to Maine’s online casino bill grows.
AROUND the WATERCOOLER: Prediction market claims vs. reality.
STRAY THOUGHTS: An RG opportunity for a bold company.
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The Lede: NJ Answer to NY Casinos Is Too Little, Too Late
New York recently approved licenses for three downstate casinos, which has New Jersey lawmakers scrambling to keep gambling dollars in the state.
According to NorthJersey.com, there will be a significant push in the summer to expand gambling in the state:
“And one key lawmaker in the push for a casino at the Meadowlands Racetrack and another in Central Jersey says the effort might get grouped in with the push for a proposed $2 billion convention center near American Dream.”
“After we leave the world stage when the FIFA World Cup exits New Jersey, our next focus should be constructing a world-class convention center and casino at the Meadowlands and gaming at the Monmouth Racetrack,” New Jersey State Sen. Paul Sarlo said.
Assuming New Jersey voters have a change of heart and approve a constitutional amendment to expand gambling beyond the confines of Atlantic City (which they have rejected in the past), the problem is, the solution is a decade overdue, and as I previously wrote about the strikingly similar casino border war between Massachusetts and Connecticut, you can’t bring a knife to a gunfight:
“While it’s scant on details, the plans for the East Windsor casino have some wondering if it will offer much in the way of competition to the Massachusetts casino… The property won’t have a hotel. It won’t have any retail space of note. And it won’t have any celebrity chef restaurants. Based on the plans put forth last week, the most impressive part of the East Windsor casino appears to be the five-story 1,800-space parking garage.”
Or as I said more recently about New Jersey’s plans:
“A racino at an aging racetrack is going to have a hard time competing with three brand new/freshly renovated destination casinos… Atlantic City needs to stop being gambling-focused (since unlike the 1980s, people can gamble anywhere and everywhere in 2025). Instead of a gambling town that also has entertainment and dining options and a beach, it needs to reinvent itself as a beach town with entertainment and dining that also has casinos.”
Beyond the Headline: Revisiting Cannibalization; Or, Is Online Gambling Good or Bad
When legalization advocates need an example of the reciprocity of online and land-based casinos, they tend to point to New Jersey. However, when opponents want to highlight cannibalization concerns, they also point to New Jersey.
November revenue numbers were quite strong compared to last year:
Land-based casino revenue rose 5.7%
Online casino revenue rose 18.2%
Sports betting rose 23%
The problem is, the situation on the ground is too nuanced for topline revenue numbers, which is why I recently advocated for paying more attention to operating profits, both market-wide and at the individual operator level. As I’ve said many times, Atlantic City has some of the noisiest data in gambling, with numerous casino closures and openings, the addition of online casino in 2013 (during a period of contraction), sports betting in 2018, and a pandemic in 2020.
As The Press of Atlantic City’s Wayne Parry put it, not everyone is seeing the gains: “Despite the encouraging year-over-year totals, two-thirds of the city’s nine casinos are still winning less money from their core business — in-person gamblers — than they did in 2019, before the COVID-19 pandemic.”
And as I said in a 2024 column, not every gambling dollar is tallied the same if you’re a land-based operator:
“Another complicating factor is that online gambling partnerships favor the digital provider. For most casinos, $1 of online gaming revenue isn’t the same as $1 of retail casino revenue.” So while online gambling and sports betting are growing, the lion’s share of the revenue is sent to the online operators.
Basically, noise, noise, noise.
Way Beyond the Headline: Cannibalization’s Slow Burn
As more and more traditional sports betting operators get into the prediction market space I’m noticing the same talking points emerging: Prediction markets don’t cannibalize traditional sportsbooks, just look at the revenue numbers of both; they are growing in unison. Or, the customer base is different.
I’m reading an interesting book, Black Box Thinking by Matthew Syed, that looks at the human instinct to justify mistakes (which prevents us from learning from them), double-down on bad ideas, and our desire to not take massive ego hits by being wrong. The book highlights how people, and industries, tend to resist uncomfortable truths even in the face of overwhelming evidence.
I was always in the, yes there is cannibalization, but it’s trivial and the door swings both ways camp, but it’s clear that perspective is not as airtight as it was made out to be. New data means readjusting those beliefs.
A lot of analysts, myself included, spent years arguing (to varying degrees) that online gambling isn’t/doesn’t cannibalize land-based casino revenue: The customers are different! Look at the revenue reports!
Sound familiar? As such, I’m not even close to looking at sports betting and prediction markets growing in unison and opining that prediction markets (as currently deployed) and traditional sportsbooks can coexist without one harming the other.
My best guess is that this is because cannibalization takes time. If we use the term demand shift (which is what cannibalization is in the gambling world), slow-burn cannibalization makes far more sense, as shifting consumer behaviors doesn’t happen overnight. Adoption of new products or delivery channels takes time. The changes, like the data in Atlantic City, are subtle, and often messy.
Amazon didn’t kill bookstores in a year, but over a decade, consumer preferences tilted toward online convenience, leading to widespread closures. Or streaming services like Netflix versus cable TV: initial growth coexisted, but eventually, cord-cutting became the norm, with cable subscriptions plummeting from over 100 million U.S. households in 2010 to under 50 million by 2025. In gambling, we’ve seen similar patterns, even if total industry revenues mask the transition for a while.
I still don’t believe stalling online legalization is the answer, as I wrote in the past, “We can’t pretend Blockbuster would still be with us if we prohibited Netflix.”
Here’s a fun example from an old X thread I stumbled upon:
“Is there seepage from land-based gambling to online? I think it would be difficult to argue there isn’t… Instead of asking how long we can preserve the current ecosystem and delay the inevitable, they should ask where they fit in. How can my organization mitigate or embrace online gambling to future-proof our business and bring in younger customers?
“The answers to those questions will differ for different properties, but complete opposition is little more than a stalling tactic. All that does is give you a stay of execution. It doesn’t eliminate online gambling or the threat it may pose to your property.”
Or the many times I’ve noted that land-based is already being cannibalized (like here):
“As STTP has been saying (screaming, actually), calling cannibalization a myth is a losing argument. The question isn’t whether online gambling cannibalizes land-based gambling; instead, it’s a question of, do you want [that cannibalization to come from] legal, regulated operators or gray and black market operators?”
And I’ll wrap this up with something Gideon Beirer noted on LinkedIn, nearly two years ago:
“In the absence of legal iCasino, unregulated online alternatives will flourish/expand. The real cannibalization story is from unregulated to regulated online gaming, as seen in every regulated market in the world.”
Quick Hitter: Maine’s iCasino Bill Is on Shaky Ground
An online casino legalization passed by the legislature last year is sitting on the desk of Maine Gov. Janet Mills, who has from Wednesday to Friday to veto the bill — with every indication pointing to Gov. Mills doing just that.
Opposition was already coming from the state’s commercial casinos (operated by Penn and Churchill Downs, gambling regulators, and even usual proponents like FanDuel, the latter viewing the bill as too restrictive, handing a veritable duopoly to DraftKings and Caesars due to their existing partnerships with the state’s tribes.
And now we have a National Association Against iGaming (NAAiG) survey that shows scant support for legalization, “64% oppose legalizing iGaming, with nearly half strongly opposed. Only 16% support legalization.”
According to the press release, 51% say “they would be less likely to support a lawmaker who votes to legalize iGaming after hearing arguments for and against it.” This is an argument we haven’t seen deployed before, and is something to keep an eye on.
Obviously, these surveys (from either side of the debate) lead the respondents down the preferred path, but with plenty of opposition already lined up, this could be the nail in the coffin.
News: Catching Up on Prediction Market Lawsuits
My last update on and analysis of prediction market lawsuits was in late-October, so without further ado, here are the latest goings-on — I explained the core arguments being made here.
Kalshi vs. Nevada (Leans Kalshi Tossup Lean Nevada)
Original: Kalshi filed its lawsuit on March 28, 2025, following a cease-and-desist letter. A federal judge granted a preliminary injunction on April 9, 2025, blocking state enforcement. Nevada received a boost from potential tribal involvement, as well as a parallel case involving Crypto.com, in which Judge Andrew Gordon ruled against the prediction market.
Update: In November, Judge Gordon reversed his earlier decision, dissolving the preliminary injunction and ordering Kalshi to halt operations in Nevada. Kalshi’s motion for a stay was not granted, which could force Kalshi to geofence Nevada users. Just after Christmas, Kalshi filed its opening brief on appeal in the Ninth Circuit (analysis by Daniel Wallach and Andrew Kim) and Nevada responded (more analysis from Wallach and Kim).
Kalshi vs. New Jersey (Leans Kalshi)
Original: Kalshi filed its lawsuit on March 28, 2025, and secured a preliminary injunction in federal court on April 28, 2025, blocking state enforcement. The state appealed the decision to the US Court of Appeals for the Third Circuit, with support from a coalition of state attorneys general backing New Jersey.
Update: Nothing new to report since the last update.
Kalshi vs. Maryland (Leans Maryland)
Original: Kalshi also challenged Maryland’s cease-and-desist with a lawsuit on April 22, 2025, but a federal judge denied its request for a preliminary injunction on August 1, 2025, allowing state enforcement to proceed. Kalshi appealed to the US Court of Appeals for the Fourth Circuit. On August 13, 2025, the parties agreed to pause enforcement pending the Fourth Circuit’s ruling, and Kalshi withdrew its motion for an injunction pending appeal. Kalshi’s opening brief was due by September 15, 2025, and Maryland’s response brief is due by October 15, 2025.
Update: The case has seen numerous amicus briefs filed, with no less than five supporting Maryland, including from 38 states and Washington D.C., 30 tribes and ten tribal associations (authored by leading tribal gaming attorneys), anti-gambling groups, Better Markets, and attorney Todd Phillips who argues that sports contracts aren’t commodity derivatives.
Massachusetts vs. Kalshi (Leans Massachusetts)
Original: Massachusetts Attorney General Andrea Joy Campbell filed suit on September 12, 2025, in state court, accusing Kalshi of unlicensed sports wagering and seeking to halt operations in the state. This was the first time a state preemptively sued Kalshi, which is where things suddenly got dicey. An emergency motion for a preliminary injunction was filed by Kalshi... And then on September 16, 2025, Kalshi filed a notice of removal, transferring the case to federal court. Robinhood filed a separate federal lawsuit against Massachusetts on September 15, 2025, to block enforcement. On Tuesday, the court issued its decision, which is the most significant legal blow to Kalshi thus far, as the case has been remanded to the state court.
Update: On December 9, a hearing was held in Suffolk County Civil Court before Judge Christopher Barry-Smith on Massachusetts’ motion for a preliminary injunction to block Kalshi’s operations. No ruling has been issued.
Kalshi vs. Ohio (No line available)
Original: Kalshi filed suit on October 7, 2025, against the Ohio Casino Control Commission following a cease-and-desist order, seeking an injunction and arguing that federal preemption applies. No rulings have been issued yet, and the case is in its early stages.
Update: Nothing new to report since the last update.
Kalshi vs. New York (No line available)
Original: Most recently, Kalshi filed a federal lawsuit in the Southern District of New York on October 27, 2025, against the state gaming commission, seeking to block a recent cease-and-desist order, claiming that CFTC jurisdiction overrides state gambling rules. This is the latest action, with no court decisions yet, but Kalshi has filed for an emergency temporary restraining order and an immediate hearing.
Update: On December 17, Kalshi filed a reply supporting their preliminary injunction motion, classifying sports contracts as “excluded commodities” under CEA, and that challenges must target the CFTC, not state enforcement. The New York Attorney General filed a sur-reply opposing the injunction, calling Kalshi’s “excluded commodities” shift contradictory to prior representations and arguing that states can enforce laws without suing the CFTC first.
California Tribes vs. Kalshi (Leans Tribes Leans Kalshi)
Original: Three tribes filed the lawsuit on July 22, 2025, alleging violations under the Indian Gaming Regulatory Act. A hearing on the tribes’ motion for a preliminary injunction was held on October 23, 2025, during which the judge expressed skepticism toward Kalshi’s arguments but issued no ruling. The decision on the preliminary injunction remains pending, with no specific timeline reported.
Update: In a blow to the tribes, Judge Jacqueline Scott Corley denied the tribes’ motion, ruling they failed to show a likelihood of success on IGRA or Lanham Act claims. On IGRA, she found Kalshi’s activities governed by the Unlawful Internet Gambling Enforcement Act (UIGEA), not IGRA, as contracts aren’t “conducted on tribal lands” under current interpretations.
Ho-Chunk Nation (WI) vs. Kalshi (No line available)
Original: The Ho-Chunk Nation filed the lawsuit on August 20, 2025, alleging violations under the Indian Gaming Regulatory Act. The tribe also alleges Kalshi forms an “enterprise” of illegal gambling under RICO, breaching tribal-state compacts beyond just IGRA. No rulings have been issued, and the case is ongoing.
Update: In December, the Ho-Chunk Nation filed a motion urging the court to block Kalshi from offering sports event contracts on tribal lands during the lawsuit. They argue Kalshi’s activities directly compete with tribal gaming operations, causing “irreparable harm” to revenues and sovereignty. Kalshi opposed the injunction, filing a motion for an evidentiary hearing and expedited discovery.
Around the Watercooler
Social media conversations, rumors, and gossip.
Chris Gerlacher hit the nail on the head with this tweet:
Or as Bloomberg recently put it:
Regular readers will know my thoughts on bubbles and narratives, but prediction markets take this to a whole new level, as they are speaking to an already captive audience.
Sportico’s Dan Bernstein and I talked about this at length in a forthcoming podcast episode (look for it Saturday).
Stray Thoughts
Full disclosure: I have been an advisor to Exclaim Recovery and accepted a seat on its Board.
My friend Dan Real has spent a considerable amount of time and energy developing Hope, an AI chatbot that is part of Exclaim Recovery, but a new role that presents a conflict of interest, means that Exclaim Recovery is for sale.
Per the press release:
“The company, Exclaim Recovery, announced the public launch of Hope, an AI Gambling Harm Recovery Assistant that provides immediate, private, and personalized support to users anywhere in the world. The platform is now live and free to access at www.exclaimrecovery.com, even as the company actively seeks a buyer.
“Hope was created to address a persistent gap in gambling harm recovery. Research shows that only about 8 percent of people experiencing gambling-related harm ever seek formal help, often due to stigma, lack of access, or fear of disclosure. Hope is designed to remove those barriers by providing confidential, on-demand support directly to users.
“Unlike hotlines, clinics, or self-exclusion programs, Hope is always available and adapts to users across the full spectrum of gambling behavior. That includes individuals seeking to keep wagering within safe limits as well as those pursuing complete abstinence. The experience becomes more personalized as users choose to share additional information.”
Hope is not a fly-by-night chatbot, as it “recently completed a multi-day stress test conducted by Gaming Laboratories International (GLI) and Bulletproof, two firms widely regarded as leaders in gaming technology testing, security, and compliance,” the press release from Exclaim Recovery noted. “The company said the system performed so well that Gaming Laboratories International has requested to collaborate on a formal case study examining Hope’s technical architecture and performance.”
If your company has interest in acquiring Exclaim Recovery, I’d be happy to introduce you to Dan.