Let Me Count The Ways
Gambling industry beware: Federal intervention is gaining traction. From CFTC rulings, and bills like the SAFE Bet and PROTECT Act looming, the landscape is shifting.
The Bulletin Board
THE LEDE: A look at gambling legislation at the federal level.
ROUNDUP: G2E pnel proposal deadline; LA iCasino chatter; SC sports betting; Underdog hits Unicorn status; SI Predict [insert Joker, ‘and here we go’ meme]
VIEWS: Bet365 exits China. Why, and what does it mean going forward?
NEWS: Alberta’s online gambling bill has arrived.
AROUND the WATERCOOLER: The UK Gambling Commission killed Kenny.
STRAY THOUGHTS: A new Substack to recommend.
SPONSOR’S MESSAGE - Yes, Sporttrade is indeed a prediction market. Always has been.
The Lede: A Look at Active Federal Gambling Efforts
Threats of federal intervention are being taken far more seriously than they were just a few months ago. Congressional action is an alarm STTP has been sounding for several years, and others are now doing the same, including Eilers & Krejcik Gaming (a newsletter sponsor) and Regulus Partners, both of whom have talked about federal intervention in recent months.
Eilers & Krejcik Gaming:
“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:
“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?”
On CFDs, the Commodity Futures Trading Commission (CFTC) will soon hold a roundtable discussion that could radically alter the gambling landscape for the foreseeable future. Following the roundtable, the CFTC will likely decide where the lines are drawn for prediction markets.
But that’s not the only federal tentacle that is extending into the gambling industry in 2025
Two Plans for the Federal Excise Tax
Representatives Dina Titus and Guy Reschenthaler, the bipartisan Congressional Gaming Caucus co-chairs, have reintroduced legislation to repeal the .25% excise tax on sports betting.
The tax “does nothing except penalize legal gaming operators for creating thousands of jobs in Nevada and 37 other states around the nation,” Titus said in a statement. “Illegal sportsbooks do not pay the .25% sports handle tax and the accompanying $50-per-head tax on sportsbook employees, giving them an unfair advantage.”
A concurrent effort known as The GRIT Act has divided RG proponents and the industry, as it seeks to earmark the federal excise tax for problem gambling research and treatment.
Slot Reporting Threshold
Titus and Reschenthaler also reintroduced the Shifting Limits on Thresholds (SLOT) Act, which would raise the IRS reporting threshold for slot machine winnings from $1,200 to $5,000 and index it to inflation moving forward.
The American Gaming Association has supported this policy for several years, as the $1,200 threshold was introduced in 1977, and hasn’t changed since.
Whenever a slot machine win triggers the reporting threshold, the machine is taken offline so the appropriate paperwork can be filled out and filed, creating “tax burdens for winners and compliance burdens for casinos,” Reschenthaler said in a press release.
“Flooding the IRS with automated, outdated forms helps no one,” Titus said in a statement. “This legislation will ease the paperwork burden on businesses and players while ensuring our tax code reflects economic reality.”
The SAFE Bet Act
The new version of the SAFE Bet Act has been reintroduced (the complete text for the bill is not yet available: STTP writeup here), with four significant additions:
Prohibits reload bonuses
Restricts VIP and tiered reward programs
Mandates the disclosure of true odds for parlay wagers
Calls for a crackdown on offshore sportsbooks
As STTP has noted, the SAFE Bet Act doesn’t need to pass to have an impact:
“Passage in a hyper-polarized Congress seems unlikely, but as I’ve written, its existence could shape state-level policy in existing and slow efforts in new markets.”
And as Jeff Edelstein wrote for Casino Reports, “While the SAFE Bet Act isn’t the law of the land, some of its proposals are getting into other bills.”
Federal Bill Prohibits College Prop Bets
The Providing Responsible Oversight and Transparency and Ensuring Collegiate Trust for Student Athletes Act, or the PROTECT Act, was written by first-term Congressman Michael Baumgartner, the chair of the College Sports Caucus.
Recall that NCAA President Charlie Baker was on Capitol Hill in December for a sports betting hearing, and all but asked Congress to step in, telling the Committee that while the NCAA has made progress with a state-by-state approach, a federal ban would save him a lot of time.
And as I wrote in the aftermath of the December hearing:
“Prop bets were a topic where there was consensus agreement. While the federal government has a lot of tentacles reaching into the gambling industry… if federal oversight happens, “Prop bets feel like the camel's nose under the tent that will lead to federal action.”
Roundup: G2E Proposal Deadline; LA iCasino Chatter; SC Sports Betting; Underdog Unicorn; SI Predict
Last call to submit your ideas for a G2E panel discussion: Global Gaming Expo (G2E) has extended the panelist and panel proposal deadline to April 2, 2025. Per G2E, “We're looking for innovative ideas and forward-thinking leaders to be part of this year’s education program.” Approval/Denial will be sent in mid-June, with the conference from October 6-9, 2025.
Louisiana online casino unlikely in 2025: Despite working on a framework, Louisiana State Sen. Kirk Talbot said he doesn’t expect online casino legislation to progress in 2025. “Online gambling is a whole different animal. We obviously don’t want kids doing it. We don’t want addicts doing it, we don’t want to fuel addictive gambling with that. If done right, it can be successful; other states have proved that,” said Talbot. “We want to protect the jobs we have at Caesars, at the other land-based casinos. I have one in my district with Treasure Chest Casino in Kenner. So, we don’t want to do anything to hurt them.”
South Carolina has a second sports betting bill: Sen. Tom Davis has introduced a companion bill, SB 444, to legislation filed in December in the House by Rep. Chris Murphy (HB 3625). Both bills would authorize up to eight mobile sports betting platforms in the state. Of note, the bill sets the sports betting age at 18.
Underdog hits unicorn status: Underdog Fantasy (a newsletter sponsor) is now valued at over $1 billion, after a Series C funding round led by Spark Capital that is expected to exceed $100 million, per a press release. “Spark’s investment is a real accelerator,” said Jeremy Levine, CEO and founder of Underdog, founded in 2020. “We’re going to continue to invest in people and product – and as fast as we can. There is so much more to build, and we’re going to keep building.” The funding will likely help the fantasy sports juggernaut’s continued foray into sports betting, where Underdog is live in North Carolina, sitting on licenses in Ohio and Colorado, and targeting a Missouri sports betting license.
SI Predict is and isn’t sports betting? Interesting move from SI, which announced SI Predict, which, according to Dustin Gouker, “Says it will be a prediction market for real money (including sports betting) with a nationwide footprint and no regulation — underlines the growing and increasingly impossible situation in front of regulators, policymakers, and law enforcement.”
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Views: What’s Behind Bet365’s China Exit?
Bet365 has informed customers that it will exit the Chinese market today, March 27.
“Bet365 continually reviews and assesses the markets to which it offers its services,” a Bet365 spokesperson told NEXT.io. “The group has decided to align its focus to its core competencies in its core markets by consolidating its resources to centre on gaining market share in regions that provide long-term sustainable revenue.”
The team at Regulus expertly summarized the news, calling China a “controversial and increasingly difficult market” and saying that it has become a “relatively easy” market for Bet365 to exit. Regulus believes Bet365’s presence in the market was from “leveraging a global .com brand which Chinese customers happen to find and enjoy, potentially facilitated by ‘light touch’ and completely offshore URL management and payments management solutions to avoid or mitigate disruption.”
According to Regulus, China “represented bet365’s last material ‘dark grey’ market, with the exit leaving the group with a domestically regulated mix of over 90%, according to our estimates (now that Brazil is licensed).”
The exit also points to a growing trend, where the increasing number of regulated markets is forcing operators who have tried to “straddle the full spectrum before explicitly black,” as Regulus put it, to choose a side, as the cak and eat it too crowd is increasingly finding that strategy unsustainable amid growing regulatory scrutiny and enforcement.
The news has also sparked speculation, including a possible sale of the gambling giant.
“Sources were quick to suggest that a business largely cleansed of its black market positions could potentially be more attractive to potential suitors… As per a comment from a source in January, any sale process would only occur if the Coates family “fell out of love with the game.”
And who would be interested in Bet365, at an estimated pricetag of $10 billion? “At the front of the queue would be DraftKings, which, as one industry source suggested, is the “only real buyer” for a business of this size and footprint,” E+M reports.
I’m more of Fintan Costello’s mind on this rumor: “Buying bet365? I think it would be DK wishing 365 would buy them.”
News: Alberta Introduces Framework for Online Gambling
Alberta’s long-awaited entry into regulated online gambling took an important step forward on Wednesday with the introduction of the iGaming Alberta Act.
The Act would end the lottery’s monopoly on regulated online gambling and bring the countless gray market operators currently operating in the province under the regulatory umbrella.
Per Geoff Zochodne’s excellent coverage, if enacted, the market is expected to go live in late 2025 or early 2026. Operators would apply to the Alberta iGaming Corporation and would then be subject to taxation. The legal gambling age would be set at 18, and the province would implement similar responsible gambling and compliance policies to Ontario.
Around the Watercooler
Social media conversations, rumors, and gossip.
Really important update out of the UK (minus Bowden’s Kenny gif for space reasons):
Compliance+More has a solid writeup of the changes and reaction.
In a note, Regulus Partners summarized the policies as:
customer bonus T&Cs must be clear, fair, transparent and accessible
bonus re-wagering requirements will be capped at 10x
VIP bonuses must meet licensing objectives (with a reminder of existing high value customer incentives guidance)
bonuses cannot not be conditional on playing multiple products
Regulus estimates that bonuses account for around “10-15% of betting GGR and c. 20% of gaming GGR in the UK.”
And on that topic is this LinkedIn post from two-time STTP Podcast guest Kim Lund (Episode #8 and #34):
Alun Bowden, SVP Strategic Insights at Eilers & Krejcik Gaming, responded, saying, “One of my truisms I've been saying for at least a decade now is you have two choices in gambling, am I in the addiction business or the entertainment business.”
Stray Thoughts
I love stumbling across interesting Substacks, and this one certainly fits the bill:
