Safety last
Kalshi moves to launch its own ‘Customer Protection Hub’
Kalshi’s player protection move; Mass. securities regulator quizzes Robinhood.
In +More: Bet365 confirms China exit.
Resorts World Las Vegas to pay $10.5m fine.
Turkish banker arrested as part of illegal gambling crackdown.
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Protect and serve
One misstep at a time: Belatedly, perhaps, Kalshi appears to have woken up to the potential for its prediction markets offering to encourage irresponsible player behavior by launching what it has called its ‘Customer Protection Hub’ in order to put “customer safety first.”
In postings via LinkedIn and X, CEO Tarek Mansour said the new hub added “additional layers of safety to our customer protection infrastructure.”
He added the hub enabled “new risk-managed features” such as deposit caps, trading breaks and voluntary opt-outs.
“These safeguards work in addition to our internal market surveillance team and regulation systems to improve our market integrity.”
Another source of truth: At the same time, Mansour also announced that Kalshi has signed up with sports integrity provider IC360, in order to “enhance” the new hub’s ability to “prevent bad actors and report them to the leagues and relevant regulatory bodies.”
Lofty company: Still, Mansour’s post displayed a clear reluctance to see prediction markets as anything other than another in a long line of financial product innovations.
“No important financial innovation has ever been created without critics,” he said.
He went on to cite innovations in consumer finance such as credit cards, mutual funds, ETFs, derivatives – most of which, he said, “were called ‘gambling’ at launch” – and Bitcoin.
“Yet, these innovations have ultimately transformed modern finance for the better,” he said.
Foster parents: He added, though, that “criticism and doubts play a crucial role in this process: they help stress test new systems and often constructively encourage them to get better.”
“From day one at Kalshi, we have been conscious of our position in building prediction markets and we carry the responsibility of fostering and preserving trust in them.”
Obsession: A spokesperson from Kalshi told C+M that the company has put “significant effort into creating and testing our Customer Protection Hub.”
“As with all federally regulated financial institutions, we previously had extensive protections that were working extremely well,” they added.
“The launch of our Customer Protection Hub was simply an upgrade to our existing infrastructure driven by our obsession with customer safety.”
Your name’s not down: Still, the spokesperson added that although the company has spoken with gaming experts and OSB operators, responsible gambling organizations were “not a part of this launch.”
“This was an internal company decision that is the latest in a long line of choices Kalshi has made that place trust and safety at the forefront of our corporate strategy,” they added.
Risky business: The spokesperson noted that, as with other financial exchanges, trading on Kalshi “involves risk,” and the company offers these tools as a way for customers to manage that risk.
They added that with respect to compliance, Kalshi has an “experienced compliance and surveillance team in place” to enforce its CFTC-mandated regulatory obligations.
This includes compliance with all 23 DCM Core Principles outlined in the Commodity Exchange Act (CEA).
“We are heavily regulated at the federal level by the CFTC as a futures exchange.”
There is no word as yet as to whether Robinhood, which launched its own prediction market offering via the Kalshi site, will see its users channeled into the same hub or if it has its own plans.
C+M reached out to Robinhood for comment but did not receive a reply.
Question time
Mass. destruction: Meanwhile, the Massachusetts securities regulator has launched an investigation into trading platform Robinhood's decision to launch the Derivatives prediction markets offering, including markets on March Madness, via a deal with Kalshi.
Speaking to Reuters, Bill Galvin, Massachusetts secretary of state and the man in charge of securities regulation in the state, said he was concerned Robinhood was “linking a gambling event on a popular sports event that’s especially popular to young people to a brokerage account.”
It’s tricky: Galvin was caustic over what he said was “just another gimmick from a company that’s very good at gimmicks to lure investors away from sound investing.”
He added that his office has issued a subpoena seeking information related to how many of the company’s brokerage account users in the state have requested to trade college sports events contracts.
A Robinhood spokesperson told Reuters via an emailed statement that prediction markets “have become increasingly relevant for retail and institutional investors alike.”
“We’re proud to be one of the first platforms to offer these products to retail customers in a safe and regulated manner,” the statement added.
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+More
Bet365 China exit: The Stoke-on-Trent operator has reportedly informed its customers in China it will no longer accept bets from the country as of March 27. The news comes amid further anti-gambling rhetoric from the Chinese authorities, particularly over the now banned POGO operations from the Philippines and would mark a significant shift for bet365.
Bally’s blow: The rezoning needed for Bally’s to pursue a New York casino license application for a $4bn project in the Bronx has been rejected overwhelmingly by a local community board by a margin of 29 to five. Opponents of the scheme cited the potential for increased crime, traffic congestion and loss of parkland space in their call for the board to throw out the proposals. The plan could yet progress, however, and will next head to the desk of the Bronx borough president.
Ukraine: The government has created a new state agency called PlayCity to oversee the country’s gaming industry. PlayCity will replace the previous regulator, the Commission for the Regulation of Gambling and Lotteries, widely referred to as KRAIL, which has been dissolved amid corruption allegations and reports of online casinos being linked to Russia.
A foul up: The Social and Promotional Games Association has been publicly rebuked by the CEO of Kinectify, Joseph Martin, after issuing an unauthorized press release with a quote on sweepstakes that the company never provided. Via LinkedIn, Martin said SPGA approached Kinectify to “provide guidance on AML best practices.” Once provided, Martin said the company was “shocked” to see this guidance issued in a press release alongside a falsely attributed quote.
State-by-state
Come on down: Maryland Gov. Wes Moore’s proposal to double the online sports-betting tax rate to 30% has been scaled down to 20% following negotiations with state lawmakers. The revised rate was approved by the House Ways and Means Committee as part of the state’s 2025 budget plan. A proposed increase in the tax rate for table games from 20% to 25% has been scrapped entirely. The existing 20% rate will remain in place under the final budget framework. The changes reduce immediate pressure on operators, but some industry voices expect the idea of higher rates to return as Maryland wrestles with a $3.3bn budget shortfall.
South Carolina: A bill legalizing OSB in South Carolina was introduced to the state Senate earlier this month and would allow for a maximum of eight sportsbooks in the state. Additionally, a South Carolina Sports Wagering Commission would also be created. The bill is currently in the Senate Labor, Commerce and Industry Committee and joins HB 3625, a sports-betting bill currently in the House Ways and Means Committee.
Pennsylvania skill games ruling: The good character clause cannot be used to stop land-based skill games operators getting a license in Pennsylvania, according to the state Supreme Court. A report from Law360 said the court determined there are enough differences in opinions on the legality of skill games that they can’t be used to say someone doesn’t meet the requirement of having good character.
Resorts World settles
Slap on the wrist: The Genting-owned Resorts World Las Vegas has agreed to a $10.5m fine for allowing gambling with known ties to illegal bookmaking and histories of federal felony convictions to gambling at the casino.
The Nevada Gaming Control Board proposed the fine in response to the regulator’s investigations into the casino’s links with illegal bookie Mathew Bowyer.
The Nevada Gaming Commission is expected to rubber stamp its approval later this week.
These links emerged as part of the Ohtani scandal, which also saw former Resorts World employee Scott Sibella plead guilty in January last year in a Los Angeles courtroom to a charge of failing to report suspicious activities in his previous employment at the MGM Grand.
The Las Vegas Review-Journal noted the fine is the second highest in Nevada’s history after the $20m penalty paid by Wynn Resorts in 2019 over a sexual harassment complaint.
On report: In addition to the fine, the LVRJ said Resorts World would be required to provide regular reporting of AML activities to the NGCB and provide updated AML training to the resort’s compliance committee.
Subsequent to the investigation last summer, Resorts World had sought to steady the ship by appointing former MGM CEO Jim Murren to the board.
He has since been joined by ex-NGCB chair A.G. Burnett, and former Nevada Gaming Commission chair and Nevada governor Brian Sandoval.
Is that all? Meanwhile, in an email to the LVRJ, Sibella railed at the decision to only issue a fine to Resorts World, saying the illegal bookies in question “gambled at all the major casinos” in Las Vegas for many years.
“The question is, are these casinos in Las Vegas going to be investigated?” he told the paper.
“It will be interesting to see what occurs now between those casinos and the Gaming Control Board and the federal government.”
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In a fix
Korked: A leading Turkish banker and chair of the payment firm PayFix has been arrested as part of a move against illegal gambling within the country.
According to the state-run Anadolu Agency, Erkan Kork, who is chair of BankPozitif as well as the payment business, stands accused of laundering proceeds from illegal gambling and facilitating unlawful transactions.
He has reportedly denied the allegations.
I will try to fix you: As part of the crackdown, the Turkish central bank confirmed the licenses of PayFix and two other payments firms, Aypara and Ininal, have also been revoked.
Turkey’s Financial Crimes Investigation Board, or MASAK, found that nearly 50 million transactions tied to betting worth a total of TL4bn ($105m) were funneled through PayFix accounts to cryptocurrency exchanges.
The prosecutor’s office accuses Kork of facilitating these betting operations by integrating them into PayFix’s system.
Cold Turkey: At the start of the year, finance minister Mehmet Şimşek issued a new directive aimed at curbing the activities of illegal gambling operations within Turkey.
He said at the time that over 233,000 illegal gambling websites were identified by the authorities in 2024.
Şimşek also said the Turkish authorities were “determined to prevent unregistered economic activities and financial crimes.”
“We are taking all kinds of measures to prevent illegal betting, virtual gambling and unauthorised draws and we will continue to do so,” he added.
Events
Apr 24: The future for the UK gambling sector, London
May 8-9: Leaders in Compliance Conference, Frankfurt
May 14: Player Protection Symposium, SBC Americas, Fort Lauderdale
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