The Bulletin Board
THE LEDE: States are lining up to smash the sports betting piggy bank (again).
ROUNDUP: A look at the stories you may have missed.
VIEWS: NCPG resolution is a microcosm of what’s wrong in the RG/PG space.
CHART of the WEEK: YoY GGR Growth Rates from Eilers & Krejcik Gaming.
AROUND the WATERCOOLER: Some other perspectives on insider trading.
STRAY THOUGHTS: Just ask why and how.
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Late Addition: First read the newsletter, then listen to this interview with CFTC Chairman Michael Selig on prediction markets which was posted this morning:
The Lede: Gov. Budgets in MI and AZ Include Online Gambling Tax Increases
The big (non-prediction market) news is the governors of Michigan and Arizona desire to increase online gambling tax rates through the budget process (Straight to the Point reported on Arizona Gov. Katie Hobbs budget proposal in The Forecast tier earlier this month).
Here’s a complete look at what is being proposed in both states.
Arizona
Gov. Katie Hobbs’ FY2027 budget includes a provision that would raise the sports betting tax rate in the state from 10% to as high as 45%, through an Illinois-like tiered structure (the threshold listed below is supposed to be handle not revenue).
“Proposed Revenue Enhancements. The Executive Budget proposes modernizing streams to enhance revenue capability:
Event Wagering: A tiered fee structure raising the rate to 45% for large operators, or more than $75 million in monthly revenue. Projected impact: more than $145.9 million in FY 2027 (partial year).”
“The proposed tiered fee structure would have two fees, depending on an operator’s average monthly revenues. For operators with less than $75 million in average monthly revenue, the current fee of 10% (8% for retail) would still apply.
“For operators with more than $75 million in average monthly revenue, the fee would increase to 45%.
“The increased fee would have no impact on Tribal operators.
“The tiered structure would more closely align the Event Wagering fees with those set by other states. Arizona’s 10% fee is among the nation’s lowest, with only four states charging lower rates.
“In contrast, New York, New Hampshire, and Oregon all assess the highest fee of 51%. Based on current consumption patterns, implementing this tiered fee structure would increase ongoing revenues to the General Fund, starting with $145.9 million in FY 2027 and increasing to $202.4 million by FY 2029.”
Michigan
Meanwhile, in Michigan, Gov. Gretchen Whitmer is looking to jack up the state’s very low tax rate on sports betting, as well as a more modest increase on online casinos, in the following ways:
An Illinois per-wager fee of $.25 per bet on the first 20 million wagers, and $.50 on every bet thereafter.
Eliminates promotional deduction for sportsbooks.
Increasing the marginal tax rate on online casino revenue in the above $185 million bracket from 28% to 36%.
The changes would generate an estimated $192 million in revenue for the state, tied to Medicaid sustainability and sold as aligning Michigan’s tax rate with other states:
From the budget documents (bold mine):
Michigan’s internet gaming market is the largest among the seven states that have legalized the activity. In 2025, casinos generated $2.9 billion in adjusted gross receipts (AGR), representing Michigan players’ net losses to the casinos.
“Pennsylvania casinos, one of the nation’s largest markets, generated 10% less casino profits from online gaming, but paid roughly 50% more tax, compared to the internet casinos in Michigan… Michigan’s new 36% tax rate would remain significantly lower than Pennsylvania’s 54% rate for internet slots. Last year, only three of Michigan’s internet casinos met the threshold for the higher tax rate to apply. It is forecast to generate $135.5 million in new tax revenue in FY27, with the majority going directly to the Medicaid Benefits Trust Fund in support of health and wellness programs.”
“A new tax would also be imposed on each sports betting wager. A new 25 cents per bet tax would apply on a licensee’s first 20 million wagers annually. For wagers after 20 million, the tax on those would increase to 50 cents per bet. The same tax was enacted in Illinois last year. Michigan’s sports betting tax rate currently ranks 28th out of the 30 states that have legalized the activity… This tax is forecast to generate $38.8 million in FY27 for the Medicaid Benefits Trust Fund for health and wellness programs.”
“Currently, providers of sports betting are allowed to deduct free play from their tax base… Under the budget proposal, sports betting providers would no longer be able to deduct those wagers. Eliminating this deduction is forecast to generate $21.1 million in FY27 for the Medicaid Benefits Trust Fund for health and wellness programs.”
There are also already two legislative efforts to increase online gambling tax rates.
Massachusetts: SD 302, a comprehensive reform bill that includes a tax rate increase to 51%, was filed in February 2025, and recently had its reporting date extended to March 6, 2026.
West Virginia: HB 4397 (online casino) and HB 4398 (sports betting) would increase the online casino tax rate from 10% to 25%.
And to better understand the zeitgeist, here are the states that have increased taxes since 2023:
Ohio (2023): Doubled its tax rate from 10% to 20% in 2023.
Tennessee (2023): Shifted from a 20% revenue tax to a 1.85% handle tax.
Illinois (2024): Shifted from a flat 15% rate to a tiered tax rate of 25-40% in 2024.
Maryland (2025): Increased the tax on mobile sports betting from 15% to 20%.
Louisiana (2025): Bumped its tax rate from 15% to 21.5%.
Illinois (2025): Added a $.25 per wager fee on the first 20 million wagers and $.50 thereafter.
New Jersey (2025) Increased its online gambling tax rate from 15% on online casinos and 13% on mobile sports betting to 19.75% (plus 2.5% IAT for iCasino and 1.25% on sports betting).
Illinois (2025): The city of Chicago added a 10.25% tax on sports bets placed in the city.
And here’s where promotional deductions have been reduced or eliminated:
Louisiana (2024): Reduced the amount of promotional spending that gaming operators can deduct from their tax obligations.
Colorado (2024): Imposed a phased reduction on the amount of promotional spending that sports betting operators can deduct from their taxable revenue.
Maryland (2024): Decreased the allowable deductions for promotional spending by gaming operators.
Virginia (2024): Reduced the amount of promotional spending deductions for sports betting operators.
Colorado (2025): passed a bill that sunsets promo bet deductions.
Roundup: So Much News; So Little Newsletter Space
FanDuel joins DraftKings, bans all credit card deposits [Sports Betting Dime]: “FanDuel will no longer accept credit card account deposits nationwide for its sportsbook, casino, or racing products beginning next month. Customers today logging into their FanDuel accounts were greeted with a message informing them of the decision. The nationwide prohibition will go into effect on March 2, 2026.” STTP Thoughts: As I’ve written in the past, there’s little evidence (here and here) that credit card bans solve anything, although it’s smart for DraftKings, FanDuel, and others to get ahead of prohibitions at the state-level.
Rep. Dina Titus introduces bill prohibiting sports contracts [Dina Titus, X]: Rep. Dina Titus has introduced legislation, HB 7477, that would “amend the Commodity Exchange Act to prohibit entities registered under such Act from engaging in transactions involving sporting event or casino-style gaming contracts.” STTP Thoughts: A side note here, and something STTP has noticed, prediction markets are becoming a partisan issue, likely due to the President’s ties to and the runway his appointees have given them. As Chris Grove noted on X, “The politicization of the prediction market issue continues to pick up steam. It is not inherently a partisan issue (although it does have some partisan elements), but it is lurching towards becoming one.”
Chicago Mayor and City Councilors At Odds Over VGTs [Chicago Sun-Times]: Last year’s city budget authorized VGTs in Chicago, but Alderman Anthony Beale believes Mayor Brandon Johnson is dragging his feet to buy time for a repeal effort: “Beale is sending a letter Wednesday to the Illinois Gaming Board meant to serve as official notification that City Hall has lifted the video gambling ban, and that acceptance of license applications for video gambling can begin. The letter is co-signed by at least 15 other Council members, and is accompanied by a certified copy of the revenue ordinance that counts on collecting $6.8 million this year by licensing newly legalized video gambling terminals at bars, restaurants, theaters and bowling alleys across the city.”
Prediction Market CEOs to speak at NBA All-Star Technology Summit [The Closing Line]: The founders of the two biggest prediction markets will appear at the NBA All-Star Technology Summit on Friday in Los Angeles. Kalshi founders Tarek Mansour and Luana Lopes Lara, as well as Polymarket founder Shayne Coplan, will be among the participants on a panel about the prediction market industry during All-Star Weekend.” According to The Closing Line, other speakers include, MGM CEO Bill Hornbuckle, FanDuel CEO Amy Howe, DraftKings co-founder Paul Liberman, and Sportradar CEO Carsten Koerl.
Big Ten athletes call for prop betting ban [Legal Sports Report]: The Big Ten Conference Student-Athlete Issues Commission is asking NCAA President Charlie Baker to restrict or eliminate player-specific prop wagers on college athletes: “Prop betting exposes student-athletes to increased and aggravated social media pressure and harassment,” the statement reads. “Many student-athletes receive angry messages, threats, or public criticism from bettors when wagers do not hit. This kind of treatment is harmful, unnecessary, and often relentless.” STTP Thoughts: The NCAA is already trying to restrict prop bets, and this type of letter from student-athletes provides it with extra ammo when it’s making its case, particularly in Big Ten states.
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Views: NCPG Resolution Is Everything Wrong in RG/PG
I often argue with people over martial arts traditions, and how most are no longer applicable to the modern world (some never were) as they are misunderstood attempts to copy Japanese, Chinese, and Okinawan culture. You can go down the “Sensei” or “Oss” rabbit hole, and you’ll quickly see why most of the “tradition” is just people making crap up.
I look at these “tradition for tradition’s sake” parts of the martial arts industry as something akin to LARPers, people who have created fantasy worlds and are roleplaying scenarios. Pockets of the responsible/problem gambling community have the same issue; they create scenarios to solve and often come across as performative rather than practical.
Case in point, this nonsensical resolution issued by the National Council on Problem Gambling.
After several paragraphs starting with, “Whereas,” because nothing grabs the attention of regular people like 18th Century legal language:
“Whereas the National Council on Problem Gambling (“NCPG”) is the only national nonprofit organization that seeks to minimize the economic and social costs associated with gambling addiction. NCPG is neutral on legalized gambling.”
We get this (bold and capitalization not mine):
NOW, THEREFORE, BE IT RESOLVED THAT the Board of Directors of the National Council on Problem Gambling hereby calls on all Prediction Market Operators serving U.S. consumers to include clear, prominent, and ongoing promotion of the National Problem Gambling Helpline™ (1-800-MY-RESET) within their marketing and on-platform user experience in a manner that is comparable to practices in regulated mobile sports betting.
Two things here:
Just speak plainly. The oozing pretension and condescension in this resolution is not going to win you any friends. Stop trying to sound authoritative to insiders while alienating everyone else.
Prediction markets can’t do this. I repeat, they CAN’T do this! It would undercut their current legal cases and arguments. Asking them to slap a gambling helpline number on their site would be a total self-own, handing ammo to every lawsuit on a silver platter.
As one anonymous source in the RG/PG space put it, “It looks like the NCPG Board is trying to emphasize their authority. Why not have the new Executive Director take the lead?”
Also can we stop trying to come across as the only authority on responsible and problem gambling?
EKG Chart of the Week: Fanatics and Hard Rock Lead YoY iCasino Growth
Source: Eilers & Krejcik Gaming proprietary benchmarking and earnings signal tracking used by leading online gambling businesses and investors.
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A fascinating chart from Eilers & Krejcik Gaming’s (a newsletter sponsor) latest Online Casino Monitor highlights year-over-year Q4 gross gaming revenue (GGR) growth for select operators in the online casino space, and the leaders on the online casino side are not what people hyper-focused on sports betting might expect.
Fanatics leads the pack as the fastest-growing challenger with an explosive +175% increase, followed closely by Hard Rock at +158%. PENN also shows strong momentum at +53%.
Among the established players, FanDuel edges out the competition with +29% growth, while RSI and Caesars follow at +28% and +26%, respectively. However, that is in-line with overall market growth, which came in at +22%. Two operators lagged, BetMGM at +14%, and DraftKings barely moved the needle with just 5% growth.
This data underscores Fanatics’ and Hard Rock’s overall rise in the online gambling sphere, but it also shows there is room for casino-focused operators, as both RSI and PENN have shifted their focus away from sports to concentrate on states with online casino and sports.
This raises an interesting question: Is online casino (especially with their entries into prediction markets) the chink in the armor of FanDuel and DraftKings?
Around the Watercooler
Social media conversations, rumors, and gossip.
Some more from yesterday’s Watercooler entry:
And in video form:
Stray Thoughts
Last week, I wrote about my avoidance of gambling conferences, and I was surprised at the number of private messages I received agreeing with me. Many echoed my points, but others highlighted issues I hadn’t mentioned, like the sky-high costs of attending.
Today I want to give you one of my favorite exercises that you can use the next time you are listening to a panel or even reading an article: Whenever you find yourself agreeing with a point, ask if the person’s solution answers one of two questions:
Why? (Why is this solution necessary? What’s the underlying problem it targets?)
How? (How does it work in practice? How will it solve the issue?)
For example, we are hearing a lot about credit card prohibitions, but we rarely hear a clear “why” (why it’s needed beyond vague concerns) or “how” (how it effectively reduces harm).
When you start asking why and how, most of the time you’ll realize the person is stating a problem (real or imagined) and then proposing a vague solution (we have to ban credit cards to protect at-risk bettors) that earns a quick round of applause but crumbles under scrutiny, as it has zero real-world practicality.