Tax demand
Maryland Gov. Moore proposes doubling of OSB taxes
Budget proposals would see OSB tax go to 30%, B&M to 25%.
In +More: New Jersey sweeps attempts, Indiana iCasino proposal.
The CFTC puts pressure on Crypto.com over sports markets.
Loot box regulation up for debate in Flemish Parliament.
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At the double
Gimme Moore: Maryland Gov. Wes Moore yesterday shocked the gambling sector with the surprise inclusion of tax hikes for both online sports betting and B&M gaming within his fiscal year 2026 budget proposals.
As part of a plan to raise an estimated $987m, Moore has proposed moving the OSB rate to 30% from 15%.
Meanwhile, taxes on B&M table games will move to 25% from 20%.
Budget backgrounder: Maryland faces a budget gap of $2.7bn for FY26 on top of a $300m shortfall this current year. It is the largest deficit faced by the state in 20 years.
The budget proposal states that the doubling of the current OSB rate would raise an extra $95.4m for the general fund of the state.
The increase in the table game tax rate to 25% would contribute a further $31.3m.
The budget now moves to the committee stage.
Let’s get ready to rumble: The team at Deutsche Bank noted that despite rumblings last week that iCasino might be back on the agenda, there was no mention of it in the budget proposal. As the analysts added, this is surprising given iCasino’s more obvious potential to fill any budget gap over the OSB rise.
The team said the move to raise the tax rate was not altogether unexpected, though “likely disappointing for most.”
The team at Trust said that while they had been expecting more volatility for online, they “had not been expecting” the B&M tables tax hike.
They added that the news was in line with a theme from the last couple of years of politicians eyeing gaming and OSB as a target for increased duties.
Recall, Ohio also doubled its OSB rate from 10% to 20% in 2023, while Illinois introduced a new tiered system ranging from 20% to 40%.
Truist said that in the context of the 51% OSB tax rate applicable in New York, the rise to 30% “could have been worse.”
Rod for your own backs: Over at JMP, the team said the lawmakers and operators only have themselves to blame for creating “seemingly generous” tax structures, outside select states, since online gaming was legalized.
DB said the theme of rising taxes was “likely to remain a broader overhang on the space” as the states move through their budget processes or bills are filed to explicitly raise taxes.
JMP went on to add that this would create volatility for stocks during the current legislative sessions.
And, in fact, DraftKings was down over 3% on the day while Flutter shipped over 1.5%.
Cease and desist
Stop right now, thank you very much: Meanwhile, the Maryland Lottery and Gaming Control Agency revealed in its 2024 overview of the sector that it has sent out cease-and-desist letters to what it said were 11 illegal operators taking money from Marylanders.
Without naming the 11, the MLGCA said half-a-dozen had responded but that none had so far agreed to block access to consumers from the state.
It added that follow-up letters to each of the operators as well as initial letters to payment providers were “in progress.”
Moves to issue C&D letters are also afoot in Virginia. According to Covers.com, Virginia Lottery Board law enforcement officer Orrin Gallop told a meeting the state had a “big problem” with "hundreds" of offshore operators.
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+More
Indiana: A bill to legalize both iCasino and iLottery has been introduced in the Indiana legislature by Rep. Ethan Manning.
Under the proposals licenses would be open to riverboat operators, an “operating agent” operating a riverboat in a historic hotel district and racetrack gambling permit holders.
The tax rate would be tiered at 22% and 30%.
New Jersey: Assemblyman Clinton Calabrese has introduced separate bills to legalize and regulate online sweepstakes casinos and internet raffles.
Wyoming: A bill legalizing online casino gambling was filed by Rep. Robert Davis on Tuesday. Under the proposals, online operators would pay $100k for a five-year license with a renewal fee of $50k.
Operators that are live in at least three other legal markets would receive preferential treatment in licensing applications.
Georgia: A new poll has suggested the majority of Georgia voters favor the legalization of sports betting in the state. Of the 800 respondents, 63% support legalized sports betting while only 24% oppose it.
The poll comes as state Senator Carden Summers plans to introduce a constitutional amendment legalizing sports betting during the current legislative session.
A report from GeoComply showed multiple states with unregulated sports-betting markets seeing active accounts for legal sports-betting operators increase more than 50% year-over-year between September and January.
Intralot has been fined $5m by the Washington DC Council for not properly running sports betting in the city and circumventing small business.
Thailand: Legislation to permit online gambling within the country could be published within a month, after the cabinet approved a proposal put forward by the digital economy and society minister Prasert Jantararuangtong.
“The goal is to regulate underground gambling operations, bringing them into the legal framework and ensuring proper taxation,” Jantararuangtong told the Bangkok Post.
Separately, the paper reported a government official as saying seven groups have expressed an interest in operating a casino under the recently cabinet-approved IR legislation.
Italian lottery: The bidding process for Italy’s lottery operations contract has been launched by the country’s Customs and Monopolies Agency. Operators will be allowed to submit applications for the nine-year contract until March 17.
The winning bidder will pay €1bn for the contract, which offers a 6% profit on revenues made from operations.
The regulator is expected to award the contract within 12 to 18 months.
IGT is the incumbent via a consortium with Allwyn, Arianna 2001 and Novomatic.
Flutter Entertainment, which owns Sisal and now Snai, is expected to submit a proposal.
The Netherlands: Winning Poker Network (WPN) has received a €1.275m fine for illegally operating in the country. The KSA had originally imposed an order subject to a penalty on the operator after its Americas Cardroom and TruePoker sites were found available to players.
While WPN subsequently ceased the illegal activity, the KSA can still impose a fine for the duration of the violation.
Staying with the KSA, the regulator has issued seven warnings over breaches of the ban on non-targeted advertising, four of which relate to Formula One sports betting.
Norway: State-owned operator Norsk Tipping is lowering the maximum amount players aged 20 to 24 can lose per month on gaming to NKK3,000 ($265) for players in the 20-21 age range and NKK5,000 for players aged 22-24.
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Crypto.com feels the heat
Who’s going to tell them? With Donald Trump’s inauguration days away, US trading regulators have targeted Crypto.com for offering complex financial products tied to sports events that may violate anti-gambling laws.
Crypto.com, also known as the North American Derivatives Exchange and a major sporting sponsor, has brokered for months trades on events contracts for which team will win the NFL’s flagship Super Bowl contest.
Earlier this week, the Commodity Futures Trading Commission (CFTC) asked the firm to hit pause as it reviewed the legality of two cash-settled, binary contracts.
The exchange is making the agency sweat, refusing to immediately hand over documentation and criticizing the timing of the probe.
It said the regulator should have waited until Donald Trump was in the White House before considering any such case.
The company maintains that its “sports event contracts” are legal, citing recent federal court rulings as justification.
Just you wait: CFTC chair Rostin Behnam will step down on January 20, and the balance of the Commission will shift to a Republican-led majority.
Trump’s recent conversion to crypto triggered a boom in the price of Bitcoin and a feeling among speculators that regulations would be relaxed.
Trump himself launched World Liberty Financial, a new digital token, weeks before the US election last year, while his son, Don Jr., has just joined prediction market maker Kalshi.
The CFTC is also putting pressure on crypto exchange Coinbase to out customers using prediction market sensation Polymarket, which is not permitted to serve the US.
All around you: Crypto.com said it will keep contracts available in all 50 states while reviewing the CFTC’s notification, a fact not lost on the sportsbooks locked out of several states.
Traditional operators and the new old guard such as FanDuel and DraftKings view exchange-based markets as a major threat to revenues.
Peer-to-peer trading typically carries lower fees than sportsbooks, while the execution of trades between two counterparties itself, as opposed to wagering against the house, further eliminates the traditional house fee.
There are signs that prediction and sports event contract market offerings may extend to single-game and player-prop contracts, further encroaching on sportsbook turf.
They’re coming out of the goddam walls: Industry experts believe the wave of DFS 2.0 offerings, such as sweepstakes, prediction and events markets, is of such force it may breach the walls of the US state-by-state regulatory model.
A note by analysts at Regulus Partners said Trump had “the perfect excuse to intervene,” but questioned how the new administration would allow “investing to become sports betting by another name”.
“We believe the federal government will have to step in to define betting more precisely, potentially by amending the Wire Act (which leaves wagering undefined),” the team said.
The generally pro-gambling nature of the incoming administration “actually increases the likelihood of action, in our view, because gambling stakeholders will be listened to.”
This year “could be a defining year for US gambling,” they concluded.
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Loot box rules debate
Failing to un-box the truth: Loot box regulation – or the shoddy enforcement of such rules – has been debated in the Committee for Culture, Youth Sports and Media at the Flemish Parliament.
Minister Cieltje Van Achter pointed to the Pan-European Game Information or PEGI ratings as a solid indicator for consumers of a game’s content.
Van Achter suggested PEGI is “currently still the most suitable system to at least demonstrate this, and enjoys the support of the most important and largest console manufacturers.”
She later expressed regret that Steam, the largest PC game distributor, and Apple do not use PEGI ratings.
Virtual storefronts, zero oversight: The youngest representative to serve in the Flemish Parliament, 27-year-old Filip Brusselmans, lambasted the rules and regulations, acknowledging that the federal ban on loot boxes “started from a noble point of view” before branding it “completely pointless.”
Brusselmans added that the use of VPNs allows consumers to bypass restrictions, and instead suggested the only viable solution is to focus on the “ethics of the gaming industry itself.”
He also went on to highlight other potential harms to young people, comparing TikTok influencers to “beggars,” saying some “start a livestream and do nothing all day long but ask for gifts.”
Brusselmans added that although the social media platform claims it does not sell to minors, it is too easy to circumvent and influencers are directly responsible for such practices.
You k, Ukie? The trade body for the UK games and interactive entertainment industry has failed to enforce its promise of self-regulation on loot boxes. A recent paper by Leon Xiao and Mie Lund examined the top 100 iPhone games before and after the rules came into effect on 24 July. It found that:
Zero games with loot boxes sought to obtain parental consent before enabling loot box purchases by minors.
23.5% disclosed loot box presence, though they were predominantly visually obscured and difficult to access.
8.6% consistently disclosed the probabilities of obtaining different rewards for all loot boxes found within one hour of gameplay.
100% of games that were non-compliant before the self-regulations came into effect remained non-compliant, despite Ukie and the Apple App Store being provided with evidence of the contraventions.
Events calendar
Jan 20-21: World Regulatory Forum, Barcelona
Feb 26: Regulatory and compliance track, SBC Summit, Rio de Janeiro
Mar 10-13: Regulating the Game, Sydney
Mar 12-13: Next: NYC 25, RG Hub, New York
May 8-9: Leaders in Compliance Conference, Frankfurt
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