Prohibitions Sweep The Nation
Multiple states intensify efforts to ban sweepstakes gaming, with new bills targeting online operators, suppliers, illegal profits, and regulatory gaps.
The Bulletin Board
THE LEDE: There are now seven states looking to ban sweepstakes.
ROUNDUP: DraftKings expands Electric Poker; Kalshi and March Madness; Legalization updates; Quotes of the Week.
NEWS: March Madness betting estimates.
VIEWS: College betting restrictions are inevitable.
AROUND the WATERCOOLER: Emerging verticals and increasing scrutiny.
STRAY THOUGHTS: Take risks, but don’t go too far.
SPONSOR’S MESSAGE - Yes, Sporttrade is indeed a prediction market. Always has been.
The Lede: Momentum for Sweeps Prohibition Efforts
While attention has turned to prediction markets, the number of states looking to prohibit sweepstakes gaming operators has risen to seven.
New Jersey: An interesting turn of events in the Garden State as a sweepstakes legalization bill has morphed into a prohibition effort. A 5196, filed by New Jersey Assemblyman Clinton Calabrese, would legalize and regulate sweepstakes as online gambling operators, requiring licensure, oversight, and taxation, has been replaced by A 5447, which would “prohibit sweepstakes model of wagering” and “establish new penalties for unlawful gambling operations and practices.”
Mississippi: A bill prohibiting online sweepstakes has passed both chambers… with a catch. SB 2510, introduced by State Sen. Joey Fillingane, would prohibit sweepstakes online gambling sites and make violations a felony, subject to a $100K fine, up to ten years in prison, and forfeiture of assets. The bill passed the Senate and the House, but there is a complicating factor, as the House added language authorizing mobile sports betting, which is the proverbial poison pill in the Senate. The concurrence deadline is March 21, but the effort could end in a conference committee — the legislature adjourns on April 6.
Maryland: A bill banning sweepstakes sites has passed the Senate (47-0) and is now off to the House. SB 860 “proposes the license denial and/or license revocation of any person or entity that supports or promotes the operation of online sweepstakes games,” including suppliers and affiliates. The House Ways and Means Committee has been delaying its own hearing on the topic and is now targeting March 20 to discuss the bill.
Connecticut: The Connecticut General Law Committee introduced a bill, SB 1235, to ban sweepstakes. The bill also prohibits lottery courier services and certain sports wagers. A relatively uneventful hearing in February didn’t result in any action. That said, recent action against High5Games (see the Watercooler section below) could reignite interest in legislation.
New York: New York State Sen. Joseph Addabbo Jr. has introduced S 5935, prohibiting online sweepstakes casinos. A companion bill, AB 6475, has been introduced by Addabbo’s counterpart in the House, Assemblywoman Carrie Woerner, who chairs the Assembly Racing, Gaming and Wagering Committee.
Nevada: While not specifically about sweepstakes, SB 256 would forfeit all profits, gains, gross receipts, or other benefits relating to illegal gaming activities, increase criminal penalties, and extend liability outside Nevada’s borders. Janice Wong, a senior legislative intern for Nevada state senator and bill sponsor Rochelle Nguyen, said the bill "seeks to hold online gaming apps accountable for illegal gaming activities” during a March 12 hearing. “With the rise of online gaming apps, we've seen an increasing number of unlicensed platforms operating in the shadows, accepting illegal wagers, engaging in fraudulent practices, and profiting outside the bounds of our regulatory framework… Licensed gaming businesses follow the rules, pay taxes, and protect players. Illegal apps don’t. This bill ensures everyone plays by the same rules.”
Florida: legislation in Florida would extend the state’s prohibition on gambling to include online betting. The bills are SB 1404 and HB 953. The bills broadly define internet gambling and cover operators, vendors and suppliers, payment processors, and media affiliates in what appears to be an effort to cover sweepstakes gambling sites.
Roundup: DraftKings Expands Electric Poker; Kalshi and March Madness; Legalization Updates; Quotes of the Week
DraftKings launches Electric Poker in New Jersey: First launched in Michigan and later in Pennsylvania, DraftKings Electric Poker is now available in New Jersey. Electric Poker is a three-handed, fast-paced Texas Hold ‘Em variant with a randomly generated prize multiplier.
Kalshi unveils March Madness futures: Per Event Horizon: “You can now bet on who will make the championship, semifinals, and quarterfinals of a variety of [NCAA] tournaments, as well as earlier-round matchups. While not an exact match for moneyline bets where you wager whether one of two teams wins, you can bet “yes” or “no” on a team advancing to the next round, which ends up being a proxy for whether a team wins a single game.”
Legalization Updates: The latest updates on state-level legalization efforts.
[iGAMING BUSINESS] Hawaii digital sports betting bill passes first senate committee [Previous coverage from STTP]
[SPORTS BETTING DIME] Minnesota House of Representatives Taking Up Sports Betting Bill After Early Session Strife [Previous coverage from STTP]
[GAMBLING.COM] Arkansas Bill Legalizing iGaming, Banning Sweepstakes Set For Introduction: Saffa [Previous coverage from STTP]
Quote of the Week: “States that legalize online gaming will see dramatic spikes in gambling addiction,” Brianne Doura-Schawohl of the Campaign for Fairer Gambling said in a statement to Politico Playbook. “Research is clear. An individual suffering from gambling-related harm is 15 times more likely to die by suicide, and an individual struggling can negatively impact six other individuals.”
Another Quote of the Week: “I think any type of law or legislation that provides some sort of mechanism for those machines [VLTs] to be regulated would have to be a good thing. If people are doing things on the up and up, and the machines are paying as they are supposed to. Then, do you know why anybody would be hesitant to have regulation?” Missouri Gaming Commission Chair Jan Zimmerman on HB 970
And another Quote of the Week: "It's nice not having to listen to shareholders. Shareholders make you do dumb things." Bally's Chair, Soo Kim
And one more Quote of the Week: "You had to have more trust with the people who brought you to the party." theScore Bet founder John Levy (color from Ryan Butler: “about Penn Entertainment's acquisition of the company; theScore Bet folded in the US but is live, and thriving, in Ontario”)
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News: March Madness Betting Estimates Top $3 Billion
The American Gaming Association is estimating a record-setting $3.1 billion will be legally wagered on the upcoming NCAA Basketball Tournaments (men’s and women’s).
Vixio Regulatory Compliance (a newsletter sponsor) forecasts $3.2 billion in legal wagers on the tournaments. Per Vixio, the $3.2 billion represents nearly 2% of the total amount wagered legally in 2024:
“March Madness remains one of the highlights of the year in sports betting. In 2024 as a whole, approximately $162bn was legally bet on all sports across the 39 states* where sports wagering is legal.”
As Vixio notes, that number could be higher (and the overarching question of late is, how big is the black market?):
16 states have prohibitions against prop bets determined by the actions of any individual collegiate athlete.
15 states restrict wagers on in-state collegiate teams (Massachusetts and Rhode Island have exemptions for major tournaments).
Oregon restricts all wagers on college athletics.
"With the NCAA actively advocating for a national prohibition on all college player props, but sportsbooks increasingly reliant on props as a key component of their broader betting product offerings, the industry and college sports find their relationship at an inflection point as March Madness tips off this year,” James Kilsby, Chief Analyst, Vixio said.
Views: College Betting Restrictions are Coming
Texas and Mississippi State are the latest schools to run afoul of NCAA betting prohibitions. While not on the same level as some recent scandals, the violations are another straw piling up on the camel’s back.
As reported by Casino Reports:
“Two football players at the University of Texas — along with a non-student athlete affiliated with the women’s tennis team, a student assistant, and an athletic department employee — put nearly $15,000 in play on PrizePicks, according to a report by the Austin American Statesman.”
The Mississippi State infraction involved “a male practice squad player for Mississippi State’s women’s basketball team,” according to the Clarion Ledger. The story is the biggest nothingburger of all time, as the betting activity encompassed six bets for a total of $10 on NFL and college football games — none on Mississippi State.
As noted, this is far from the first instance:
University of Alabama: In May 2023, Alabama baseball coach Brad Bohannon was fired after suspicious betting activity was detected in a game against LSU.
University of Iowa and Iowa State: In May 2023, Iowa and Iowa State announced multiple student-athletes were suspected of violating NCAA gambling rules. The investigation went completely sideways, but the betting did take place.
Notre Dame: In August 2024, Notre Dame suspended its men’s swimming program for at least one academic year after an external review uncovered numerous NCAA gambling rule violations.
Louisiana State University: Former LSU wide receiver Kayshon Boutte, who left the school in 2023, was accused of betting on at least six LSU football games while still a student-athlete.
Temple: The university’s men’s basketball program has been under NCAA and federal investigation since March 2024 due to suspicious betting activity and unusual line movements in multiple 2023-24 season games, including a notable loss to UAB, with former player Hysier Miller suspected of betting on and possibly manipulating outcomes.
Fresno State: In early 2025, Fresno State and the NCAA investigated two men’s basketball players who participated in daily fantasy contests based on their own performances.
University of New Orleans: Another school under investigation for possible NCAA violations related to sports gambling is the University of New Orleans. As STTP previously reported during the Temple investigation, as many as six NCAA were under investigation.
As seen during the September congressional hearing, colleges and sports betting (player harassment, prop bets, and other collegiate betting concerns) is a likely pathway for the SAFE Bet Act, rightly or wrongly. As I wrote last year, “These aren’t indictments on the legal betting industry. Many would argue they were uncovered because of legalization. Still, the public perception is that legalization has created these scandals.”
These scandals/violations highlight various integrity and athlete exploitation concerns, which align with the SAFE Bet Act’s push for federal oversight and prop bet bans — something the NCAA has advocated for — STTP interviewed the architect of the SAFE Bet Act, Harry Levant last week.
Every incident galvanizes NCAA support and increases public pressure, giving lawmakers like Tonko and Blumenthal ammunition to overcome industry resistance and pass the SAFE Bet Act.
But, as I’ve previously said, passage isn’t necessary: “The SAFE Bet Act will continue to be a constant threat. The people pushing for these restrictions and prohibitions (and I’m not talking about the lawmakers) aren’t going to give up. RAWA was never enacted, but it effectively held up legislation at the state level for many years.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
Today’s Watercooler section is more news than gossip, with an emphasis on recent actions against emerging verticals.
Starting with Underdog (a newsletter sponsor) paying a fine in New York and receiving licensing in New Jersey and Delaware (Casino Reports):
“One big door closes, two small doors open for Underdog Fantasy. The company is leaving New York — and paying a $17.5 million fine to do so — but is entering New Jersey and Delaware with its Pick ‘Em Champions product.”
Next up is Illinois taking aim at PrizePicks (Chicago Sun-Times):
“The Illinois Gaming Board sent a cease-and-desist letter to PrizePicks just days ahead of the Super Bowl, declaring that some of the Atlanta-based company’s daily fantasy contests "constitute illegal gambling in violation of Illinois law” and could draw fines. Illinois Attorney General Kwame Raoul also urged them "to cease unlicensed sports betting.”
Then there is Connecticut targeting High5Games (NBC Connecticut):
“The Department of Consumer Protection has suspended the license of High5Games, an online gaming service provider, for allegedly running an illegal online casino… The online gaming provider marketed their online casino as legal and licensed, which officials say is untrue… A total of 1,100 customers made deposits and gambled online, DCP officials said. That included people who had signed up for the state's Voluntary Self-Exclusion List.”
Finally, Kalshi has requested an extension to respond to the Nevada Gaming Control Board’s cease-and-desist letter (Event Horizon):
“The NGCB said Kalshi asked for more time to respond to a cease-and-desist order to stop offering betting on sports, elections and other markets in the state. A “limited” amount of time was granted to Kalshi, which originally had a deadline of 5 p.m. Pacific time to respond.”
Stray Thoughts
Apropos of the above entry:
"Only those who will risk going too far can possibly find out how far one can go."
— T.S. Eliot
The question is, will they go too far?