Splitters
FanDuel and DraftKings resign from the AGA over predictions differences
The OSB market leaders will forge their own path on predictions.
Kalshi suffers a legal setback in Nevada.
In +More: UK government ‘considering online sports betting move.’
Sports integrity: NBA asks teams to hand over their phones.
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Go your own way
Excuse me, are you the Judean People’s Front? DraftKings and FanDuel have dramatically resigned from the American Gaming Association (AGA) over the issue of their response to the rise of prediction markets, after a meeting in Washington on Monday.
Fuck off. Judean People’s Front. We’re the People’s Front of Judea! A FanDuel statement given to InGame said the decision was driven by a recognition that following its move into the space, confirmed last week, it was evident it was “not aligned” with the rest of the AGA.
A DraftKings’ statement said its own prediction market plans “no longer fully align with the AGA’s direction in certain areas and has decided to relinquish its membership.”
I hate the Romans already: The AGA said it had accepted the request from the OSB market leaders to “relinquish their memberships, effective immediately.”
“We wish them the best, and we expect to maintain close ties in our mission to promote and protect legal, regulated gaming,” the AGA added.
The only people we hate more than the Romans… While FanDuel and DraftKings are set to follow the lead of the likes of PrizePicks and Underdog down the predictions path, the B&M gaming operators have shown themselves to be more circumspect.
BetMGM CEO Adam Greenblatt said on his company’s Q3 analyst call that “as the law stands today, sports prediction markets are, in essence, illegal sports betting.”
MGM Resorts’ Bill Hornbuckle followed up during his company’s Q3 call, saying that “for decades, the gaming industry has been highly regulated at state level.”
Caesars Entertainment interactive president Eric Hession said on the company’s Q3 update that it “can’t be out on the lead on this one,” while CEO Tom Reeg said “we will not put any of our licenses at risk.”
… are the Judean People’s Front: A clear signal of the frustrations of some B&M operators came from Penn Entertainment CEO Jay Snowden, who said prediction markets pose a “major threat” to the gaming industry as a whole.
“I do think as an industry that we’ve got to play some offense here,” he told analysts on the company’s Q3 earnings call.
Snowden added that the gaming industry “sitting around and monitoring what’s happening” was “not going to be a viable strategy.”
Nevada predictions ruling
No stay: A key legal setback may be looming for prediction market operator Kalshi in Nevada, as a federal judge signaled he is likely to overturn an injunction that has allowed the platform to continue operating in the state despite regulatory opposition.
According to Bloomberg, during a hearing last Friday, the judge indicated the injunction, originally intended to prevent the Nevada Gaming Control Board from enforcing its sports event contract ban, may soon be reversed.
A ruling is expected within two weeks.
Asking the big questions: The judge reportedly questioned whether sports-related event contracts fall within the intended scope of federally regulated derivatives markets, noting that the “definition of a derivatives contract is too broad,” and suggesting these products may not align with federal regulatory intent.
This latest development follows similar tensions elsewhere.
The CFTC declined to intervene after a separate Nevada court dismissed Crypto.com’s injunction relating to its own sports contract offering.
More broadly, multiple states are engaged in litigation over sports prediction markets, with several issuing cease-and-desist letters to operators.
Implications: Kalshi contends that its contracts are regulated as derivatives under the CFTC’s oversight and should therefore preempt state intervention.
However, Nevada regulators have taken the opposite view, warning that companies offering such markets could jeopardize their state gaming licenses.
The implications extend to major operators: both DraftKings and FanDuel have indefinitely paused their Nevada licensing efforts, amid concerns that offering prediction markets could conflict with state gaming law and damage future operations.
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+More
The opposite of harmonization: The UK government is thought to be considering “a slight” increase in the tax rate on online sports betting, as well as the much rumored hike on remote gaming duty and potentially an uplift in machine gaming duty. The FT reported the Chancellor is considering a two-tier regime for betting on sports, with higher taxes for wagers placed online. Horserace betting will not be part of the increase. Yesterday, E+M reported that UK gambling taxes are almost certain to be targeted after the news broke last week that the Labour government has reportedly opted not to raise income tax, meaning it is likely to take a ‘smorgasbord approach’ to filling the hole in the public purse.
Some Sin for nuthin’: The US Treasury’s Office of Foreign Assets Control and the Financial Crimes Enforcement Network (FinCEN) have launched a joint action targeting cartel-backed money laundering networks operating through Mexico-based gambling businesses. The operation centers on the Hysa Organized Crime Group, which officials said washes narcotics proceeds through casinos and entertainment companies across Mexico and Europe. US officials added that the Hysa network operates with the consent of the Sinaloa Cartel, which controls much of the group’s territory. FinCEN simultaneously proposed cutting 10 Mexico-based gambling establishments off from the US financial system.
Regrets, I have a few: In Massachusetts, lawmaker John Keenan has publicly expressed regret over his earlier vote to legalize sports wagering, arguing the market has evolved in ways he did not anticipate. He has since introduced legislation that would ban both prop bets and live/in-play wagers, impose strict gambling limits, and raise the tax rate on sportsbook operators.
Norsk Tipping’s $2.48m fine has been formally upheld by regulator Lottstift, after an Easter draw malfunction produced 52 incorrect lottery winners when valid entries were mistakenly deleted. Lottstift said the failure constituted a “significant violation” of lottery rules.
New research from GambleAware suggests that more than five million adults in Great Britain want to reduce their gambling. The figure was derived from the charity’s 2024 Treatment and Support Survey combined with the latest ONS population estimates, applying the finding that 60.8% of British adults gamble at least weekly.
New York: The Metropolitan Park casino development proposal put forward by Mets owner Steve Cohen, in conjunction with Hard Rock, for Citi Field in New York has run into legal difficulties, following a lawsuit from the US Tennis Association. The USTA claims that Cohen and Hard Rock cannot develop the site due to a leasing agreement with the Billie Jean King National Tennis Center.
Sports integrity
Hand them over: The NBA has requested that multiple teams turn over cellphones, documents and other records as part of an investigation into alleged illegal sports-betting activity involving non-public injury information.
Specifically, the probe is tied to the US Department of Justice’s indictment of key figures from the NBA, including former player/coach Damon Jones and guard Terry Rozier.
The DOJ alleges these individuals shared internal injury details or rest-status information with bettors, leading to wagering on at least seven games.
Lakers of fire: As part of this effort, the NBA retained the law firm Wachtell, Lipton, Rosen & Katz to conduct an independent inquiry. Among the teams under scrutiny is the Los Angeles Lakers.
The league reportedly asked that at least 10 Lakers employees, including trainer Mike Mancias and executive administrator Randy Mims, surrender their phones and phone records.
Neither Mancias nor Mims has been charged, and neither was named in the original DOJ filing.
Inside job: The inquiries stem partly from allegations that Jones sold “insider” injury information on Lakers players, and while the players aren’t named in the indictment, media speculation focuses on LeBron James and Anthony Davis.
In one referenced episode, a March 2023 game involving Rozier saw approximately $200,000 placed on a prop bet after he allegedly told a friend he intended to leave early due to injury.
Open mind: Meanwhile, Congressional oversight has sharpened: a bipartisan group of six members of the US House Committee on Energy and Commerce demanded answers from NBA commissioner Adam Silver on the league’s controls around injury disclosures and sports‐betting integrity.
The NBA has signaled openness to further regulation, noting the rapid growth of legal sports wagering and the associated “integrity risks.”
A different ball game
No props: Meanwhile, the NFL has circulated a fresh memorandum to all teams and players underscoring its ongoing prohibition of certain prop bets, in light of recent federal investigations into gambling-related misconduct.
The league noted it is “actively engaged with both state lawmakers and regulators, as well as with our sports-betting partners, to limit and where possible prohibit altogether prop bets in the NFL.”
Specifically, the memo listed the types of wagers it already prohibits, including markets based on player injuries, fan safety, or misconduct; bets tied to officiating, and wagers whose outcomes are fully determinable by a single person in one play.
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Caesars’ Nevada fine
Settling up: Caesars Entertainment has agreed to pay a $7.8m fine to settle allegations by the Nevada Gaming Control Board (NGCB) that it failed to prevent AML breaches linked to convicted illegal bookmaker Mathew Bowyer.
The proposed settlement will be reviewed by the Nevada Gaming Commission at its November 20 meeting.
Free pass: According to a five-count complaint, Caesars allowed Bowyer to gamble freely across its properties – including Caesars Palace, Harrah’s Resort Southern California and its Lake Tahoe venues – for several years despite repeated red flags, beginning with his classification as a “high risk” customer in 2019.
The NGCB said Caesars had evidence that other casinos had banned Bowyer as early as 2017, yet it did not cease serving him until January 22, 2024.
The alleged failures include a lack of verification of Bowyer’s source of funds, failure to ban him and inadequate due diligence.
At base: Bowyer is regarded as one of the largest illegal US bookmakers, with more than $325m in bets handled via the interpreter for Shohei Ohtani, Ippei Mizuhara.
Bowyer pleaded guilty this year to illegal gambling, money-laundering and tax offences, and began serving a one-year federal prison sentence in October.
Caesars stated that “integrity and regulatory compliance are paramount” and that it “fully cooperated” with the NGCB’s investigation, reaffirming its commitment to strengthening its AML and know your customer procedures.
AMhell to pay: Nevada regulators have warned that enforcement is intensifying amid a wave of AML cases in 2025, having already handed smaller fines to other operators, such as MGM Resorts International, Resorts World Las Vegas and Wynn Resorts.
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