This week’s Casino Cabbie “Letter From America” features a clutch of big names in the regulatory firing line: from prediction market platform Robinhood to Apple and Google, who find themselves the target of a so-called RICO lawsuit over alleged involvement in distributing and profiting from illegal gambling.
Massachusetts Gets Tough
While sweepstakes gambling is caught in a swirl of lawsuits and legislative crack-downs, futures betting has emerged as a slick new way to offer sports markets by side-stepping regulatory scrutiny.
Last week, for example, Robinhood partnered with Kalshi–now duly registered with the regulatory Commodity Futures Trading Commission (CFTC)–to introduce an on-site prediction market feature, available in all 50 states.
But the move quickly drew the ire of Massachusetts Secretary of the Commonwealth Bill Galvin, who oversees financial markets and securities regulation, and on March 20 he subpoenaed Robinhood — and launched an investigation into whether product–offering financial contracts, tied to events like NCAA March Madness, constitutes illegal gambling.
Robinhood has until April 3 to comply with the subpoena and provide internal communications and details on how many users in Massachusetts have traded college sports event contracts through their platform.
This isn’t the first time Robinhood has tested the limits. They tried to pull off a similar feat in February, offering Super Bowl markets, only to be slapped down by the CFTC.
How RICO It Is
In another twist for the ongoing sweepstakes saga playing out across the U.S., a new RICO federal class action has been filed against Apple and Google by old-hands Julio Bargo (NJ) and Lamar Prater (NY), joined by new plaintiff Rebecca Pratt (NY).
The class action suit accuses both Google and Apple of being integral in promoting and distributing illegal gambling via their platforms and profiting from it.
The powerhouse companies are accused of actively assisting sweepstakes in targeting consumers and serving as the financial conduit for unlawful gambling.
This constitutes “active and knowing participation in illegal gambling”, asserts the lawsuit, and ultimately violates federal anti-racketeering statutes. Hence, it is a Racketeer Influenced and Corrupt Organizations (RICO) case.
The plaintiffs seek to recover monetary losses sustained by all players who engaged with any sweepstakes application distributed by either company.
This is Bargo and Prater’s third attempt to shake-down the sweepstakes industry and seek player reparations. Their previous cases were dismissed without prejudice. But this time, Bargo and Prater have widened their aim by targeting the distribution network.
Resorts World Rapped
Resorts World Las Vegas (RWLV) has agreed to pay the second-largest settlement in Nevada’s history–US$10.5 million (£8.1 million)–for anti-money laundering failures.
The settlement, due to be approved today, March 27, follows an investigation by the Nevada Gaming Control Board (NGCB) filed in August 2024, which found 10 violations of federal anti-money laundering laws.
The complaint detailed how RWLV knowingly allowed a number of illegal bookmakers–among them Mathew Bowyer, who allegedly ran one of America’s largest illegal bookmaking operations, and Damien Le Forbes–to gamble millions through the property without proper oversight.
The failures occurred during the tenure of former RWLV President Scott Sibella, who was fired in 2023. In a separate case, Sibella pleaded guilty in January 2024 to violating federal money laundering laws.
The settlement, months in the making, highlights the “numerous remedial measures” implemented, including leadership changes since the initial complaint.
Alongside the fine, RWLV has agreed to extensive internal reforms and increased compliance reporting to the NGCB.
The settlement is the second-largest in Nevada’s history, behind Wynn Resorts’ US$20 million (£15.48m) fine in 2019 for failing to address sexual misconduct allegations against former chairman Steve Wynn.
Maryland’s Tax Hike Revised
Meantime, Maryland state Governor Wes Moore’s budget proposal to hike online sports betting taxes moves forward.
The proposed hike was initially set to double taxes from 15 percent to 30 percent of gross gambling revenue. But this week it was revised down by the state’s House and Ways Committee to a more modest 20 percent. Much to the relief of operators.
The revised five percent tax increase forms part of a broader strategy by the Democrat governor to plug the state’s US$3 billion (£2.32bn) budget deficit.
Local lawmakers have until April 7 to approve the state’s new 2025 budget.
