It's Prediction Time
There are several significant updates to report on the prediction market front, including an acquisition that paves the way for Polymarket to enter the US market.
The Bulletin Board
THE LEDE: 5 prediction market updates: Polymarket returns, CFTC staff cuts, Maryland legal battle, Quintenz hearing, and words have meanings, or do they?
ROUNDUP: Maverick bankruptcy; Chicago ponders adding an OSB tax; AGA pens two prediction market op-eds.
NEWS: A lawsuit over the 1-800-GAMBLER helpline.
BEYOND the HEADLINE: Problem gambling rates are declining, but do we know why?
AROUND the WATERCOOLER: $2 billion is a drop in the bucket.
STRAY THOUGHTS: You’re gonna need a bigger
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The Lede: Prediction Market Roundup
I have three four five prediction market items to report:
Polymarket is one step closer to a return to the US.
CFTC has laid off more than two dozen employees.
The latest on Maryland v Kalshi.
Kalshi’s latest attempt to redefine words.
Senate Committee removes Quintenz confirmation from schedule.
And don’t forget the relaunch of PredictIt, some fireworks during a prediction market panel at NCLGS, Rumors of a DraftKings and Railbirds mashup, and a million other pieces of news.
Cue Up the Undertaker Gif
Significant news broke on Monday with the announcement that Polymarket has acquired QCEX for $112 million. QCEX is a derivatives exchange that has recently been licensed by the Commodity Futures Trading Commission (CFTC) as a designated contract market (DCM) and a derivatives clearing organization (DCO). The news comes fresh on the heels of the Department of Justice dropping its investigation into Polymarket (which STTP reported on last week).
As Polymarket CEO Shayne Coplan posted on X, the acquisition paves the way for the return of Polymarket to the US:
Coplan also noted that “Owning a DCM and DCO will let us serve all American traders and brokerages. This acquisition isn't just about a license; it’s Polymarket's homecoming, returning stronger and ready to serve American users once again.”
For those looking for a deeper dive into the nuts and bolts of what this means, I recommend the following:
Polymarket's US Return: An FAQ — The Event Horizon newsletter
Breaking: Polymarket sets the seal on US return with QCEX buy — Earnings+More newsletter
Steven, I like your hustle. That's why it was so hard to cut you.
According to a Reuters report, the CFTC has let over two dozen people go, according to an agency source. The layoffs come a week after a US Supreme Court decision to clear the way for mass government layoffs.
As I previously noted, depending on how Kalshi’s legal battles unfold, the CFTC could potentially be tasked with regulating sports betting in the US, and its ability to handle such a task is questionable.
I asked AI to estimate the total number of regulators and support staff needed to oversee sports betting across the country:
Low-end: 1,000 staff, assuming smaller agencies and minimal tribal/federal involvement.
Mid-range: 1,400–1,600 staff, accounting for 1,200 state staff, 150 tribal, and 50–100 federal.
High-end: 2,000 staff, if larger states have bigger teams, and outsourcing is limited.
As Reuters reported, the CFTC only has “636 full-time equivalent staff positions in fiscal 2025.”
Those 636 employees (minus whatever the cuts are) are tasked with overseeing, not just sports contracts, but the multitrillion-dollar swaps market — the US swaps market’s notional value is likely $250–350 trillion, compared to sports betting’s $200–300 billion in handle.
As I wrote:
“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?”
Maryland Judge Has a Lot of Questions
Kalshi has been touting its legal successes, but the case moving through the Maryland court system has an entirely different feel.
Unlike courts in Nevada and New Jersey, Judge Adam Abelson has raised questions about Kalshi’s inconsistent stance, noting that in a prior case against the CFTC (when it was fighting to offer election markets), Kalshi argued sports events lack economic significance and are not “excluded commodities” under the CEA.
As Andrew Kim, a partner at Godwin Law (and an STTP podcast guest), noted on LinkedIn:
“One of the issues that may be on Judge Abelson’s mind is the presumption against preemption: if Congress wants to displace state regulation in an area where states have long regulated, it’ll do so clearly. Judges Gordon (NV) and Kiel (NJ) gave the presumption short shrift when ruling in Kalshi’s favor. The Fourth Circuit’s recent decision in GenBioPro, Inc. v. Raynes serves as a reminder that the presumption shouldn’t be short-changed.”
The decision Kim is referencing is a newly minted Supreme Court ruling (GenBioPro, Inc. v. Raynes) that some believe could bite into Kalshi’s central claim, which is that as a CFTC-regulated entity, Kalshi operates legally under federal guidelines, and attempts to impose state-level gambling regulations infringe on federal authority.
What Are the Odds, You’ll Say Odds?
The following prediction market item reminded me of the scene in Dumb and Dumber, where Lloyd bets Harry that he will get him betting by the end of the day, and Harry accepts the bet.
Josh Sterling, a lawyer for Milbank who represents Kalshi in ongoing federal litigation, argued at a gaming conference last week that prediction markets differ from sports betting in part because “there are no odds being set.”
Straight to the Point covered Sterling’s contentious remarks last week, which you can find here.
That argument fell apart rather quickly.
As Sportico noted, “Kalshi users can view prediction market contract prices in an American odds format.”
Kalshi’s digital merchandise shop offers “What are the odds,” hats.
And as Dustin Gouker has dutifully catalogued here and here, Kalshi used/uses the word “bet” quite often.
Sterling later told Sportico that the distinction lies in line-setting:
“If Kalshi presents buy/sell interest in terms of American odds, that does not change the fact that Kalshi is not setting those odds,” Sterling told Sportico in an email. “The odds would reflect market sentiment in the event contracts available on its market (i.e., buy and sell interest).”
STTP thoughts: Given the last two news items, one has to wonder if we are starting to see the first cracks in Kalshi’s arguments.
No hearing for Quintenz
Yesterday was supposed to be the day the Senate Committee on Agriculture, Nutrition, and Forestry voted to advance Brian Quintenz’s nomination as the chairman of the CFTC, but the Committee’s calendar was changed, and Quintenz’s name was removed, per reporting from Matt Rybaltowski.
It may be a nothingburger, but there has been quite a bit of pushback with tribes and the commercial gaming industry asking the Senate to push for more forthright answers from Quintenz on sports event contracts.
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Roundup: Maverick Bankruptcy; Chicago Considers OSB Tax; AGA Prediction Market Op-Eds
Maverick Gaming files for bankruptcy, closing four WA cardrooms [Covers.com]: Maverick Gaming has filed for Chapter 11 bankruptcy in Texas, listing assets and liabilities between $100 million and $500 million. The company operates 27 properties across Washington, Nevada, and Colorado, with 2,500 slot machines and 320 table games, but Maverick is best known in the wider gambling world for challenging tribal exclusivity for sports betting in Washington State (the Supreme Court declined to hear Maverick’s appeal) and its CEO’s high-stakes poker appearances. As part of the restructuring, four Washington card rooms will close, but Nevada properties will continue operations. Maverick secured $22.5 million in debtor-in-possession financing to maintain operations during reorganization.
Chicago City Council considers online sports betting tax [Chicago Sun-Times]: Illinois has been hammering online sports betting operators with tax increases, and now cities are getting in on it: “Chicago should crack down on illegal sweepstakes machines, tax online sports betting and lift the city ban on video gaming — but only after demanding a greater cut of tax revenue from the state, City Council members said Monday.” Per the Sun-Times, Chicago Chief Financial Officer Jill Jaworski “disclosed that the Johnson administration has already ‘done the analysis’ on imposing a local tax on ‘Draft Kings’ and other online sports betting ventures.” To which Councilwoman Jeanette Taylor said, “People download them and gamble all the time. We should be able to get money off of them.” STTP Thoughts: This is what I meant by misaligned goals.
AGA pens two op-eds on prediction markets [Des Moines Register & Kansas City Star]: Opinion pieces from AGA President and CEO Bill Miller appeared in Iowa and Kansas newspapers, with Miller arguing prediction markets are gambling in disguise, undermining state regulations, risking consumer safety, and threatening the economic benefits of legal gaming. Miller urged federal authorities to clarify that prediction markets fall under state gambling laws, not federal financial regulations, to ensure consistency, protect consumers, and maintain the integrity of state gaming systems that have been carefully developed over the years.
News: A Fight Over the 1-800-GAMBLER Number
This could be the zaniest legal dispute I’ve had to cover, as two prominent responsible and problem gambling groups are embroiled in a legal fight that could result in the end of the national 1-800-GAMBLER helpline number. The fight is over a $150,000 annual licensing fee (a paltry number in the gambling industry).
The dispute between the Council on Compulsive Gambling of New Jersey (CCGNJ) and the National Council on Problem Gambling (NCPG) stems from a 2022 contract allowing NCPG to use the helpline number nationwide for a $150,000 annual fee.
The agreement expired on May 31, 2025, and according to SBC Americas, the NCPG has “made several attempts to initiate arbitration, required by the initial contract, without a response from CCGNJ.” A Mercer County Superior Court judge issued a temporary restraining order, maintaining the helpline’s operation until August 26, per Covers.
It’s unclear why the CCGNJ hasn’t renewed the contract. Still, there are several possible explanations, including a disagreement over the future financial terms of the agreement or perhaps control over the helpline’s operations.
STTP Thoughts: The 1-800-GAMBLER is the NCPG’s baby. The organization made a national helpline a top priority for many years and finally achieved that goal in 2022. Losing it now would be a significant blow to the organization, which is in a state of flux following the abrupt departure of its longtime executive director, Keith Whyte, in January.
Beyond the Headline: PG Rates Decline. Do We Know Why?
In other National Council on Problem Gambling (NCPG) news, the latest NCPG survey shows a decrease in problem gambling risk:
“A national survey released today by the National Council on Problem Gambling (NCPG) finds the spike in risky gambling behavior observed during the COVID-19 pandemic has eased as awareness of the gambling health crisis and access to needed care has expanded.
“This new research shows that the nationwide efforts in responsible gambling and public awareness are making a positive impact, but the work is far from over,” said Derek Longmeier, NCPG Board of Directors President. “We must build on this momentum by embedding problem gambling into the broader public health infrastructure and investing in what we know works: collaboration across prevention, education, treatment, and research with the support of the government and communities.”
The press release gives credit to public awareness campaigns, but I’d also mention that we are five years past the sports betting legalization boom, and we could just be seeing a reversion to the mean — as seen in Connecticut, where multiple studies (and the authors are not at all pro-gambling types) found a similar trend; introduce new gambling and watch problem gambling rates rise and then fall back to normal:
1997 Study: Found a decrease in probable pathological gambling from 2.7% in 1991 to 1.2% in 1996.
2024 Study: Historical data from the study notes a decline from 3.2% in 1991 (pre-casino) to 2.9% in 1996 (post-casino openings), and then to 1.8% in 2009 and 2023.
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Around the Watercooler
Social media conversations, rumors, and gossip.
When is $2 billion not a lot of money? When it represents six months of trading volumes on sports event contracts.
As Chris Grove noted on X, “I think there's a lot to like about Kalshi and a lot that OSB operators should learn from the app. But numbers like this need context to have any meaning. For instance: During the last six months, bettors in Colorado alone have wagered about $170 million on ping pong.”
Or as Dustin Gouker’s The Closing Line newsletter noted, “FanDuel and DraftKings have each done north of $20 billion in handle for the first six months of the year. ESPN Bet, which is the No. 6 sportsbook in the US by most metrics, has done about $2 billion in handle.”
And as I’ve previously reported, trades on Kalshi are not an apples-to-apples comparison for betting handle. As Sporttrade’s David Huffman previously explained, “Handle represents 'actual exposure,' while trading volume captures all matched trades, regardless of whether they represent new risk, and regardless of the counterparty.”
Stray Thoughts
Too much news to have any extra thoughts today.