Weekender: Cannibalization Is Now A Prediction Market Talking Point
A look back at the week that was in the gambling industry, including Straight to the Point's weekly legislative updates.
The Bulletin Board
THE LEDE: Prediction markets want to know where the cannibalization is.
LEGISLATIVE UPDATES: This week’s legislative updates for paid subscribers.
THE READING LIST: A look at the articles Straight to the Point is reading.
NEWSLETTER ROUNDUP: The best of the best in gambling newsletters.
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The Lede: Is Absence of Evidence (of Cannibalization) Evidence of Absence?
Prediction market supporters have opened up a new line of attack against the commercial and tribal casino industries, pointing out that revenue is increasing for both sectors, despite their saber-rattling over cannibalization from prediction markets.
These attacks have been occurring on social media:
And it even surfaced at the recent prediction market hearing held by the House Committee on Agriculture’s Subcommittee on Commodity Markets, Digital Assets, and Rural Development:
“Bean was asked by a committee member about a report out Tuesday that tribal gaming saw a 5.3% increase in revenue in 2025 and whether that means that tribes are still thriving despite the prediction markets. He responded that while revenue went up overall, many tribes are experiencing losses. ‘The increase is nowhere near the explosive increase we have seen in prediction markets in the last 18 months.’”
Here’s the problem with that attack:
It has nothing to do with the core argument. The fundamental dispute is not whether commercial or tribal casino revenue happens to be up this year. The fight is over whether prediction markets can offer nationwide sports betting outside the state/tribal regulatory framework.
Tribal and commercial casinos aren’t where you’d expect to see cannibalization from online sports bets through prediction markets, and certainly not during the previous fiscal year. As Straight to the Point has noted multiple times, cannibalization in gambling is a demand shift, and it takes time. Adoption of a new product or delivery channel is gradual, and the early data is going to be subtle and messy.
As I previously noted, prediction markets have largely focused on states that still lack legal sports betting, which further delays any visible impact. The clearest early signals have appeared in sports-betting handle (softening or declining year-over-year as prediction-market volume has risen), not in land-based or tribal casinos.
What tribal and commercial casino operators are more concerned about is the possibility of prediction markets expanding beyond sports into casino-style games, considering prediction markets have shown a propensity to push the envelope. As I previously wrote: “Consider for a moment, that in the span of a few months Kalshi went from election markets to sports betting to
parlayscombos, despite arguing in court that election markets should be allowed because it’s not like they’re sports events, which are clearly off limits. Yet, we are supposed to believe… that they won’t, at the first opportunity… start offering casino contracts.”
Legislative Updates:
Some of what you’ll receive with a Forecast Tier subscription
The Reading List: Suggested Reading from STTP
The Last Click: The gaming affiliate industry has a problem [Philip Atkinson, X]
Prediction Market Ads Are Out of Control [Jonathan D. Cohen, Isaac Rose-Berman, City Journal]
Gambling Tax Talk: ‘If You Strangle The Golden Goose Too Much, It Will Stop Laying’ [Jill R. Dorson, InGame]
Why I Bought A Book That ‘Failed’ [Adam Bjorn, InGame]
Frank Floor Talk: Can players tell you’ve tightened your slots? [Buddy Frank, CDC Gaming Reports]
Can Prediction Market Operators Replicate Their US Success in Europe? [David Cook, iGaming News] Includes comments from yours truly.
Why every conference doesn’t need a new campaign [Hillary McAfee, CDC Gaming Reports]
No, “Ordinary Users” Aren’t Losing Half a Billion Dollars on Kalshi [Kalshi News]
