Risk: The Game of Global Domination
Kalshi's expansion beyond the borders of the US is raising a lot of questions.
The Bulletin Board
THE LEDE: Prediction market news cranked up to 100 after G2E.
ROUNDUP: DC Mayor revives poker effort; Canadian ad restriction bill advances; RI still considering ending sports betting monopoly; Allwyn + OPAP.
NEWS: Newsom signs CA sweepstakes ban.
AROUND the WATERCOOLER: Is Texas next to crack down on sweeps?
STRAY THOUGHTS: Smart risk or reckless gamble.
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The Lede: Catching Up on Prediction Markets
The prediction market news cycle is moving at an alarmingly fast rate, to the point that this post will probably be outdated within a couple of hours of posting.
I didn’t spend a lot of time last week covering prediction markets, as I wanted to let the dust settle from G2E to get a better glimpse of the overall landscape, and I’m glad I did, because there are quite a few updates to relay.
Polymarket’s US Launch Delayed by Shutdown
Polymarket’s much-anticipated return to the US market has hit a snag due to the ongoing federal government shutdown.
With the shutdown freezing non-essential government operations, any approvals are on ice, potentially pushing back the timeline until a funding bill is passed. This comes on the heels of Polymarket’s $2 billion deal with Intercontinental Exchange (ICE).
As an aside, STTP has been banging the drum that the CFTC is simply not equipped to handle oversight of sports betting, which is a problem considering the insider trading examples below are becoming more frequent:
Kalshi Raises $300 Million; Launches Globally
Kalshi has announced another round of funding ($300 million) led by heavyweights like Sequoia Capital and Andreessen Horowitz, at a valuation of $5 billion.
At the same time, Kalshi announced it is expanding to over 140 countries, creating a unified global liquidity pool that lets users from around the world bet on the same events.
This raises several questions, most notably what happens if countries complain? The US has poo-pooed the idea that an online operator can offer betting options to US customers because it’s legal in their home jurisdiction. Kalshi’s model flips that script by operating from the US and extending outward, but regulatory backlash could emerge if foreign governments view it as unlicensed gambling in their territories.
For instance, nations with strict betting laws might push for blocks or international complaints, echoing past US disputes with offshore sportsbooks. Kalshi claims that the CFTC gives it carte blanche to offer whatever it wants, but extending that beyond the shores of the US is far more perilous.
“I am not sure how I would describe a sports betting site that is apparently accepting players from Belgium, Brazil, China, Finland, Germany, Greece, India, Italy, Japan, Mexico, The Netherlands, Norway, Portugal, Spain, South Korea, Sweden and Vietnam from a sole license in its host domicile,” Eilers & Krejcik Gaming SVP Strategic Insights Alun Bowden said on LinkedIn. “But I think I would probably use a darker shade than white.”
It would appear from social media reports, including from Sportico’s Dan Bernstein, that even “prohibited” countries aren’t prohibiting Kalshi:
Bernstein later posted a statement from Kalshi, indicating the company believes verified users can access their accounts from anywhere, as it complies with Kalshi’s membership agreement:
Insider Trading
No update on prediction markets would be complete without addressing the elephant in the room: insider trading, which was already on the radar before suspicious activity on Polymarket surrounding the 2025 Nobel Peace Prize announcement.
Bets surged on the eventual winner just hours before the reveal, prompting the Norwegian Nobel Committee to launch a probe into potential leaks — there’s some online speculation as to what happened.
What’s interesting is the number of people defending insider trading as part of the prediction market process, claiming “insider trading” enhances market accuracy by incorporating privileged info faster, turning it into a feature rather than a bug. Others have a different perspective:
For now, it’s a reminder that these markets come with ethical and legal asterisks.
Extra Prediction Market Reading:
Kalshi Resolved Two NBA Preseason Games Early And With The Wrong Winner
Kalshi Launches NFL Player Prop Bets For Passing, Rushing, Receiving Yards
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Roundup: DC Poker Effort; Canadian Ad Restrictions; RI Sports Betting Monopoly Isn’t Safe Yet; Allwyn+OPAP
DC Mayor renews effort to legalize poker, blackjack, and bingo [WJLA (ABC 7)]: After it was stripped from the budget earlier this year, DC Mayor Muriel Bowser is taking a second swing at legalizing poker, blackjack, and bingo “as part of a broader strategy to shore up the city’s finances and attract tourism in the face of economic uncertainty.” Bowser’s proposal is being pushed by Councilmember Kenyan McDuffie, who chairs the Committee on Business and Economic Development. However, the local press is reporting significant political obstacles.
Canadian marketing restriction bill advances [S-211]: The Canadian Senate Transport and Communications Committee advanced Bill S-211, a bill that would rein in sports betting ads. As STTP previously reported, “Ontario Senator Marty Deacon reintroduced Bill S-211 on May 28, aiming to establish a national framework for sports betting advertising in Canada. The bill has been framed as a response to the surge in ads following the regulation and launch of online gambling in Ontario. The previous effort passed the Senate, but was upended by Canada’s special election.”
Rhode Island considers an open sports betting market [Rhode Island Current]: After fielding requests for proposals from eight online operators, Rhode Island regulators are considering ending the current sports betting monopoly and opening the market: “[The] Lottery is moving ahead with its examination of whether adding more apps is feasible,” Lottery spokesperson Paul Grimaldi said in an email to Rhode Island Current.
Allwyn and OPAP announce $16 billion merger plans [Earnings+More]: Pretty substantial news broke this morning: “The operators of the UK National Lottery, Allwyn, and its Greek counterpart OPAP have agreed an all-share merger to create a €16bn lottery and gaming giant, and reshape the European and global landscape in the process.” Recall, Allwyn recently picked up a majority stake in PrizePicks.
News: Newsom Signs Sweepstakes Ban
It’s official, California Gov. Gavin Newsom signed AB 831 this weekend, officially prohibiting online sweepstakes casinos and betting sites in the state.
AB 831 was introduced by Assembly Member Valencia on February 19, 2025, seeking to amend the Business and Professions Code and add to the Penal Code to prohibit online sweepstakes casinos and similar betting sites that simulate gambling.
Its main target was the unregulated “dual-currency” models used by sweepstakes casinos and betting sites.
Despite some tribal opposition, AB 831 breezed through the legislature in a series of unanimous votes last month.
This may not be the last word on sweepstakes in California, either. There is also the lawsuit filed by Los Angeles City Attorney Hydee Feldstein Soto’s office alleging that Stake.US is operating a de facto illegal gambling site. As previously reported, “The suit also targets Stake’s suppliers and streaming service Kick, which is accused of promoting Stake in California.”
For those keeping score at home:
It’s been one year since the “alarm bell” was pulled on sweepstakes casinos at last year’s G2E - a year capped off by yesterday’s signing of a stringent sweepstakes enforcement bill by California’s Governor.
Let’s look at the scorecard over the past year (h/t Howard Glaser): 17 states have declared sweepstakes casinos illegal gambling, through legislative, regulatory, and legal action. With the addition of six states that already have prohibitive sweepstakes laws, a total of 23 states are now no-go zones for sweepstakes casinos.
Extra Reading: Sweepstakes Casino Operators Ponder Strategy Amid California Difficulties
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Around the Watercooler
Social media conversations, rumors, and gossip.
Coming Soon? Texas AG opinion against sweepstakes:
STTP is very confident that this is coming soon.
Stray Thoughts
I’ve played thousands of hours of poker and learned many valuable life lessons from the game. It, along with my thousands of hours of martial arts, has also given me a unique insight into character traits, including a person’s willingness to take on risk, which I find is a good proxy for many other characteristics.
I’ve known many excellent poker players who take so many shots and are willing to take on massive risks that it’s only a matter of time before the inevitable crash. They point to the math that tells them they have an edge, but don’t consider what happens when the stakes are high and you don’t come out on top. It’s the financial version of Russian Roulette, yes, the odds are in your favor, but the risk is simply too high. Play enough poker and you’ll run into these folks, usually borrowing money to play low stakes as they build up their bankroll for another run.
The danger lies in hubris. The overconfidence that turns a smart risk into a reckless gamble. Not every (seeming) edge needs to be exploited; sometimes folding is the ultimate win, even when you might have an edge.