It was always going to be an eventful second term for President Trump, but few would have predicted such a frenetic pace of change, as traditionally-resilient gambling stocks have tanked, then surged every which way, writes iGF U.S. correspondent Lauren Harrison in her latest “Letter From America”.
This week, atop all the burn and churn, comes the news that yet another ex-employee from the controversial prediction market website Kalshi has joined the federal government — or to be more precise Elon Musk’s Department of Government Efficiency to represent DOGE’s interests at the U.S. Securities and Exchange Commission.
Lawyer Eliezer Mishory is Elon’s chosen one, following ex-Kalshi Board Member Brian Quintenz appointment as Chair of the regulatory Commodity Futures Trading Commission (CFTC) last month.
And, read on, there’s even more hot Kalshi news to report:
Kalshi Gets Green Light In Nevada
Tarek Mansour’s iGaming-by-any-other-name platform has won a temporary restraining order against the Nevada Gaming Control Board (NGCB), allowing it to continue operating in the state and preventing the NGCB from enforcing its cease-and-desist order.
U.S. District Court Chief Judge Andrew P. Gordon issued the temporary ruling on April 8.
“I have no evidence that (at least thus far) the Commodity Futures Trading Commission has taken action to prevent Kalshi from offering sports-based event contracts,” ruled Judge Gordon.
“As a result, at this point in time, federal law allows Kalshi to offer both sports and election-based event contracts on its exchange.”
Judge Gordon argued that in this case the “Supremacy Clause” applied, in other words federal law supersedes state legislation.
And he affirmed that because Kalshi is CFTC-designated: “Nevada regulatory agencies thus have no jurisdiction to decide that Kalshi’s conduct violates state law where, at least at present, those activities are legal under federal law.”
The timing of the injunction is key as the Kalshi chaos continues, with the number of states openly investigating the platform now standing at four: Connecticut, Massachusetts, Michigan, and Washington; while another six, comprising Ohio, Nevada, Montana, Illinois, New Jersey, and latterly Maryland, have issued cease-and-desist orders.
The power struggle continues, and will do so, it appears, until the CFTC delivers a defining judgement, which, forgive the pun, will trump any state objections.
California Meltdown
It appears the sun has set on what many hoped would mark the beginning of renewed sports betting negotiations in California.
So, what went wrong?
At last week’s Indian Gaming Tradeshow, FanDuel and DraftKings finally sat down with Tribal leaders for a long-awaited roundtable. But talks swiftly unravelled after the Sports Betting Alliance invited a journalist — an act that, while arguably within protocol at a public event, was seen as a breach of trust by Tribal leaders.
Tribal gamers have previously stressed the importance of trust, saying commercial entities must come with transparency and humility if they want to partner with the Tribes–who hold exclusive rights to gambling–and participate in the future of Californian sports betting.
Moreover, with memories still fresh from the disastrous 2022 ballot push, Tribal leaders remain adamant: Partnerships require humility, transparency, and tribal leadership.
Without it, they warn, California remains closed for business.
Baltimore VS DraftKings And FanDuel
A DraftKings-FanDuel pairing is usually exciting news. But not when it comes in the form of a lawsuit. This one filed by the city of Baltimore.
The lawsuit accuses both companies of predatory practices and utilising user data to target and fuel gambling addiction, rather than protect players.
It alleges that both companies: “Have sought to guarantee their profitability by cheating, hoping to hook, and then ultimately exploit, as many users as possible.”
And of going out of their way to avoid implementing the safeguards they use in other jurisdictions.
The complaint was submitted to the Baltimore City Circuit Court on April 3.
We await the Maryland ruling with keen interest.
Louisiana Lately
With Louisiana’s regular legislative session set to close on April 14, State Senator Adam Bass (R) has made a last-ditch attempt to outlaw sweepstakes.
His State Bill 181 aims to prohibit “gambling by computer”, which includes using dual currencies to play online games or contests with a chance of winning a prize or cash equivalent. The bill is awaiting referral to the House Committee.
Massachusetts Crackdown
State Senator John Keenan, Democrat, has introduced Senate Bill 302, entitled the “Bettor Health Act”.
The bill aims to curb the state’s rapidly-expanding sports betting market — and better protect consumers.
The legislation–referred to the state’s Joint Committee on Economic Development and Emerging Technologies–would increase taxes for online operators from 20 to 51 percent, ban prop betting and advertising during sports broadcasts, introduce stricter financial controls–including daily betting limits and affordability checks, and increase support for addiction treatment services.
In an interview published on Boston.com, Keenan compared the gambling industry with big pharma, calling the situation an impending health crisis that required immediate attention.
