Do Not Cross This Line

The Ohio Casino Control Commission has issued a stern warning to its licensed sports betting operators about offering sports contracts via prediction markets.

Steve Ruddock

Aug 27, 2025

THE LEDE: Ohio regulators draw a line in the prediction market sand.
ROUNDUP: BetMGM and Caesars upgrade apps ahead of NFL season; ESPN Bet looking for a boost from ESPN’s DTC service; Caesars adds surcharge in IL.
VIEWS: Trump Jr. invests in Polymarket and joins Advisory Board.
QUICK HITTER: AC casinos are all profitable; some more than others.
VIEWS: Once again, I ask: Is the CFTC equipped to oversee sports betting?
AROUND the WATERCOOLER: What customers want in a sports betting app?
STRAY THOUGHTS: Request for comment.

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The Lede: Ohio Regulators Warn Licensed Sportsbooks

Dustin Gouker’s excellent The Closing Line newsletter got its hands on a letter sent from the Ohio Casino Control Commission (OCCC) to Ohio’s licensed sports betting operators that reads in part:

“If an Ohio sports gaming licensee chooses to offer sporting event contracts in Ohio through their own DCM or FCM (or those under common ownership or operated by a related entity) … the Commission will consider these choices as it evaluates the continued suitability of a sports gaming licensee, including key employee licensees, to maintain a license.”

As I’ve pointed out in the past, licensed gambling operators are in a precarious situation as Kalshi’s (and others’) foray into sports contracts plays out in court. If they follow suit and offer these products, they run the risk of losing their licenses (with no idea how the legal proceedings will play out). If they wait, they risk losing ground if the courts rule in Kalshi’s favor.

We’ve already seen FanDuel dip its toes with its CME agreement, and DraftKings, Underdog, and PrizePicks appear to be getting ready to send up some test balloons.

I’ve argued with others in the industry that offering these markets only in jurisdictions without legal online options won’t be enough for many regulatory bodies, and the OCCC letter backs up my argument:

“If an Ohio sports gaming licensee chooses to offer sporting event contracts in Ohio through their own DCM or FCM (or those under common ownership or operated by a related entity) … the Commission will consider these choices as it evaluates the continued suitability of a sports gaming licensee, including key employee licensees, to maintain a license.”

Also of note, the letter highlights “sports contracts,” which helps explain FanDuel’s recent agreement with CME, not including sports contracts, at least not yet.

As Regulus Partners recently noted:

“Flutter’s deal with CME suggests more than the preparation of a toe for water that DraftKings’ earlier registration with the NFA could be interpreted as. FanDuel will avoid sports events so as not to antagonise the state regulators upon which it depends, and also to stay on the right side of sports integrity concerns due to the more limited oversight offered by the CFTC, recently vocalised by the NFL (what individual prediction markets operators do to protect integrity is different to a clear legal requirement with enforcement apparatus).”

Roundup: BetMGM & Caesars Upgrades; ESPN Bet Prominent in ESPN DTC; Caesars Surcharge in IL

BetMGM unveils app upgrades ahead of the NFL season [Press Release]: BetMGM has upgraded its app, with CEO Adam Greenblatt calling it "the fastest, most user-friendly and best product we've ever offered," designed with player feedback and ingenuity for a premium experience. In addition to visual upgrades, the new app has: A smoother, faster navigation for seamless use; scrollable displays for popular markets, scores, props, and quick parlay builders; live same-game parlays for football; a centralized rewards dashboard; and in-app research on teams/players, trends, streaks, and GTG Network-powered data.

Caesars also upgraded its app ahead of the NFL season [Press Release]: Caesars Sportsbook's NFL season updates include a 2-3x expanded wagering menu with more props, themed Same Game Parlays, and Quick Picks for faster betting. The app also features a redesigned homepage, improved search, enhanced cash-out options for props and parlays, live stat tracking, and expanded livestreaming capabilities. Other additions include the NFL Flips game for weekly Bonus Bets, a Universal Digital Wallet in 19 jurisdictions, progressive NFL Jackpots, and boosted Caesars Rewards multipliers.

ESPN Bet prominently featured in new ESPN streaming service [SBC Americas]: “Every game stream in ESPN DTC has an option for a window with five tabs: Stats, Key Plays, Bets, Fantasy, and Shop. Via the Bet tab, ESPN users on the ESPN app or the connected TV experience can follow wagering odds and market info. ESPN Bet account holders can also track their active bets and get quick access to ESPN Bet through the ESPN app directly or via a QR on the connected TV, as long as they are in a legal sports betting state.” However, the integration stops short of linking directly to the ESPN Bet app. STTP Thoughts: The key question is whether this will move the needle for ESPN Bet, which has struggled to gain market share.

Caesars adds $.25 surcharge to wagers in Illinois [SBC Americas]: Nine out of 10 Illinois sportsbooks agree that they need to offset the state’s new per-wager fee. The latest is Caesars, which announced a $.25 transaction fee. Only bet365 hasn’t changed its policy in Illinois.

Five operators set a minimum wager amount:

BetRivers — $1 minimum
ESPN Bet — $1 minimum
Hard Rock — $2 minimum
BetMGM — $2.50 minimum
Circa Sports — $10 minimum

Four operators have added a per-wager surcharge:

Fanatics — $.25 per-wager fee
Caesars — $.25 per-wager fee
DraftKings — $.50 per-wager fee
FanDuel — $.50 per-wager fee

Views: Trump Jr. Takes Advisory Role with Polymarket

As if we needed more intrigue in this space [scoop from Axios]:

“The world's largest predictions market has received an investment from Donald Trump Jr.'s venture capital fund, Axios has learned exclusively… 1789 Capital, which Trump Jr. joined last year as a partner, invested double-digit millions of dollars into Polymarket, which recently was valued north of $1 billion by Founders Fund. Trump Jr. also will join Polymarket's advisory board.”

“Trump Jr. earlier this year joined Polymarket rival Kalshi as a strategic advisor. The Kalshi role is a paid position, not reflective of an investment. At this moment, he seems to have a foot in both camps.”

Don’t say I didn’t warn you. While others (pretty much everyone) pointed to the appointment of Donald Trump Jr. as a strategic advisor to Kalshi as a “the cake is baked” development, I cautioned in February that we might be getting over our skis:

“The speculation (and let’s be honest, that’s all this is) that Trump is fawning over prediction markets for having him as the clear favorite in the 2024 election has the same hollow ring as the belief that, as a former casino developer and owner, he has a soft spot for the casino industry.
“If we look at the first Trump term, there was no shortage of similarly flattering comments about the people he appointed and organizations that supported him. In plenty of instances, there was a falling out, followed by a complete exile.
“In the same vein, a lot is being made about Donald Trump Jr.’s appointment as a special advisor to Kalshi. A conduit to the President is undoubtedly helpful, but let’s not get out over our skis here. There are plenty of worlds where this has the same impact as a celebrity endorser for a sportsbook or poker site.”

I raised the same concern when Andrew Kim came on the podcast in April to discuss prediction markets:

“I've always been [of the opinion] that maybe this isn't as baked as people are making it out to be. I mean, obviously, there's the Trump Jr. strategic advisor [position], but I know a lot of people who are strategic advisors in very powerful positions, and nothing really happens because of that.”

Quick Hitter: Some Will Win, Some Will Lose

A lot is made of revenue, but a much better metric is gross operating profit, something Atlantic City casinos report quarterly.

Q2 2025 was a solid one for the Atlantic City casino industry, with gross operating profits up 6% year-over-year.

Still, as the Press of Atlantic City’s Wayne Parry notes, “Much of the collective gains came from a handful of casinos that are outperforming the rest; six of the nine casinos saw their profits decline from what they were in the second quarter last year.”

“The cost of doing business continues to go up at a time when the business dynamics of popular internet gaming and sports wagering products may mean that Atlantic City’s casino operators are keeping less of the gross gaming revenue than ever,” Jane Bokunewicz, director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism, said.

Views: Can a Reduced CFTC Staff Oversee Sports Contracts

I was among the first to raise concerns, but there is growing consternation about the capability of the Commodity Futures Trading Commission (CFTC) to properly oversee a 50-state sports ~~betting~~ contracts industry.

In May, I noted that the CFTC had a staff of less than 700 to oversee not only sports contracts but also crypto and the multitrillion-dollar swaps market.

“No matter how on board the CFTC is with sports contracts, one has to wonder if it’s equipped or has the appetite to handle it. Is hiring hundreds of experts to oversee sports contracts, which at the top-end might account for $100 billion of the $300 trillion in trades you oversee, worth it?”

And as recently reported, the CFTC’s capabilities have been diminished since my original post:

“[Acting CFTC Chair Caroline] Pham has removed several senior managers from their positions, while also overseeing a headcount reduction of at least 15% and the discontinuation of a third of the agency’s open investigations, citing a backlog.”
“Stripping back a staid financial regulator like the CFTC is unlikely to provoke the same outcry as cuts to the Environmental Protection Agency or the Department of Education—or even the Securities and Exchange Commission… But the health of the low-profile agency matters. Futures and commodities sit at the heart of the global economy, facilitating trade in energy, food, and finance and affecting the price of everything from coffee and corn oil to gasoline. When the financial system crashed in 2008, it was partly because of the growth of complex derivatives that have since been brought under CFTC oversight.”

I’d also point to the CFTC’s silence on sports contracts. It hasn’t taken any position and is more or less letting Kalshi self-certify whatever it wants.

As Joe Brennan Jr. said about self-certification on the Prime Suspects podcast, “If I got to grade my own papers, I would've gone to Harvard.”

Further, as Dustin Gouker recently noted, it’s not really clear who is minding the store:

“Kalshi started listing new NFL betting markets this week. One of them — for the point total in the game between the San Francisco 49ers and the Los Angeles Chargers — listed the “San Francisco Unified School District” as the source for verifying the outcome… a ridiculous source.”
“Last month, I covered how Kalshi had what I guess is a “display issue” on a market about X/Twitter’s CEO leaving… That market is still open since she hasn’t been “replaced,” even though the market originally asked only whether she would leave. (She definitely left, but the full underlying rules indicated that a new CEO would have to be hired in order to resolve to ‘yes.’”

Now imagine the CFTC under Brian Quintenz, who, based on previous comments, is going to take an even more hands-off approach.

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Around the Watercooler

Social media conversations, rumors, and gossip.

Do prediction markets have a UX problem?

The jury appears split:

The problem is something I’ve discussed in the past (as it relates to online poker sites), including this article from 2015:

“When poker was at its peak, new players logging on to a site for the first time had only a few options to choose from. Sites weren’t offering mixed games, Badugi, or PLO8. There were only a few different sit-and-go formats. And the tournament lobby didn’t need to be color-coded… While I’m not against innovation, it seems like games and formats are constantly added, but none are ever removed. This has led to less “game liquidity” and a very confusing experience for new players who have to navigate lobbies that require multiple filters to read… I get that virtual space is cheap to inhabit, but when you go to a restaurant for the first time and they hand you a menu with 300 dishes, it’s a bit overwhelming.”

Basically, online poker and sportsbook lobbies are challenging to navigate. They’re designed for spreadsheet wonks, not casual bettors. Now, the question is, does Kalshi (or some other prediction market) solve this UX issue, or is it more of the same, or perhaps even worse?

Stray Thoughts

I’ve been contacted numerous times by mainstream outlets for my perspective on this or that in the gambling industry. These 300-500-word responses often end up as a sentence or two in the article, but every now and then, my responses get a little more play, and rather than a sound bite, the reader gets some of the larger context.

One recent example is Katherine Fung’s piece for Newsweek, where I was quoted several times — the article is definitely worth reading.