Welcome to edition 40 of Letter From America. This week, the “Kalshi Crisis” continues to unfold as the regulated betting industry and state authorities bite back, filing amicus briefs and weighing in on Flaherty et al (New Jersey) vs. Kalshi. Meanwhile, in Louisiana, DraftKings and FanDuel announced a US$0.50 (£0.40) player surcharge per bet.
Amici Assemble
Recap: Following the New Jersey Division of Gaming Enforcement’s (DGE) issuance of a cease-and-desist order to Kalshi in March, Kalshi responded with legal action, securing an early injunction that allowed it to continue operating while the full case unfolds.
The New Jersey DGE is now appealing the injunction, marking a pivotal moment as this is the first Kalshi case–one of three–to reach this stage. Amicus briefs can be filed in such appeals and offer perspectives not presented by the parties directly involved.
And boy, has the industry assembled to weigh in.
Since Tuesday night through today (June 19), 34 states, 60+ federally recognised Tribes, 9 Tribal organisations, and the American Gaming Association (AGA) have come together to submit amicus briefs.
Their argument: Kalshi’s operations undermine state laws and jurisdiction. The AGA also emphasised that the Commodity Futures Trading Commission lacks the regulatory infrastructure needed to oversee sports betting markets.
Meanwhile, Tribal leaders added that Kalshi’s model violates the Indian Gaming Regulatory Act and breaches existing state-Tribal compacts, infringing on Tribal sovereignty.
New York, New York
It’s been a busy fortnight in the Empire State: a bill banning sweepstakes has headed to the governor’s desk, casino bid rules were formalised, and sports betting revenue hit a new record.
Senate Bill S5935A passed the House and Senate and now awaits Governor Kathy Hochul’s (D) signature.
The bill outlaws sweepstakes and targets third-party service providers, placing New York alongside Montana and Connecticut in banning these sites. Violators face fines of between US$10,000-100,000 (£7,452-74,521) per offence.
In land-based news, the New York State Gaming Commission’s Gaming Facility Location Board finalised two key financial conditions for the three available downstate casino licences this week: a US$500 million (£395m) licence fee and a US$500 million minimum capital investment.
Bids, which must also meet zoning and environmental standards, are due by June 27, with licences expected to be awarded by the end of 2025.
Meanwhile, according to the latest data from the New York State Gaming Commission, May also saw the Empire State set a new monthly record for gross gambling revenue (GGR), hitting US$248.9 million (£196.63m) – up 22.1 percent year-on-year (y-o-y).
FanDuel remained the market leader for the second consecutive month, followed by DraftKings.
Betting Brands Bite Back
FanDuel and DraftKings have become the first Illinois betting brands to introduce policies aimed at slashing their company tax bills in response to the state’s new betting levy.
The tax–a betting surcharge of US$0.25 (£0.20) on each wager up to the first US$20 million (£15.8m) in handle, then US$0.50 (£0.40) thereafter–will be paid directly by players as both operators plan to charge Illinois consumers double the levy, applying an extra US$0.50 to each bet.
DraftKings CEO Jason Robins said he was “disappointed” by the lawmakers’ decision to more than triple taxes within two-years, adding: “Should the legislation be repealed, the company will immediately remove the Illinois-specific per-wager transaction fee.”
The new tax follows the 2024 hike, which introduced a sliding scale system, raising tax rates from 15 percent to 35-40 percent for operators crossing US$100-200 million (£79-158m) in adjusted gross receipts; namely FanDuel and DraftKings.
Last year’s increase reportedly cost each firm over US$50 million (£39.5m) in extra taxes.
The question now is: Will other operators follow their lead, or could this surcharge give smaller, lower-taxed rivals a competitive edge that puts them ahead?
New Jersey’s Record-Breaking May
New Jersey set a new revenue record for online gambling in May, with GGR reaching US$246.8 million (£195.97m). Total GGR for all activities reached US$614.7 million (£485.61m), up 20.5 percent y-o-y.
For the first time in months, land-based gaming outpaced online, hitting US$265.3 million (£209.59m) in GGR, up 10.9 percent y-o-y, while sports betting revenue grew by 30.2 percent year on year, reaching US$102.5 million (£80.98m).
For both iGaming and online sports betting, FanDuel led the market with DraftKings in second.
