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Fox News
24-04-2025
- Sport
- Fox News
Oddsmakers don't miss business of booking NFL Draft: 'I'll sleep like a baby'
When the prehistoric Professional and Amateur Sports Protection Act (PASPA) was finally struck down in May 2018, it paved the way for legalized sports betting across America as we know it today. Sure, you could bet on games and events like the NFL Draft in Nevada before the Supreme Court's ruling, but you couldn't log into your mobile betting app and wager from your couch in Illinois or New York or Pennsylvania. Sportsbooks started launching left and right and all those books fought for customers. Man, I miss the days when a sportsbook would offer you a $1,000 "risk-free" bet just for signing up. Some offers were bigger. Those were the days. Sportsbooks also found themselves competing in the realm of creativity. Shops like BetMGM, Caesars, DraftKings and FanDuel decided it was better to have more markets to entice customers to wet their beaks. The more options, the more action. This made the 2019 NFL Draft a damn free-for-all. It was the first time you could bet on the draft outside Nevada, and I vividly remember stories of bettors driving or flying to different states to whack mispriced markets. Draft position totals were posted in early March, some places posted head-to-head matchups, and long shots were plentiful along the way. Problem is, bettors were getting sound information before the sportsbooks and blasting sharp wagers at decent limits. In those days, you could see a player go from Under 13.5 -115 to Under 13.5 -600 on a random Tuesday. The books took a bath in 2019 on things like T.J. Hockenson going exactly eighth overall and Dexter Lawrence falling outside the top 10. You just knew it couldn't last forever. Longtime Las Vegas bookmaker Chris Andrews shut down NFL Draft betting a couple of years ago as head honcho at the South Point. He offered draft markets for years but got sick and tired of seeing red on the spreadsheet. I'm sure deep down he misses booking it. "Oh my God, no," Andrews told FOX Sports over the phone. "It was never what we should've been doing as bookmakers. There's always somebody that knows what a team is going to do in the draft. There's always a leak somewhere. And if the leak gets to the right wise guys, you're dead." Fascinating, isn't it? "It's also not a contest," Andrews continued. "It's not a game between the Phillies and the Mets, and you're handicapping which team you think is better that day. The draft has nothing to do with that. It's all about who gets the information first and people that got it before we did won every year. "There was nothing I could do about it." Draft markets are few and far between in Vegas. South Point and Golden Nugget didn't offer any menus, the Westgate offered one-day, $500 limits for six hours this past Tuesday and Circa booked $300 limits for a week. It's clear the headaches just weren't worth it. "Several years ago, we went up with a prop on how many linebackers would go in the first round," Andrews recalled. "We put up [O/U] 3.5. Three linebackers ended up going, but one of the big offshore outfits paid out four by mistake. "A couple guys came to me and said they had Over 3.5 and this book paid Over so we should do the right thing, too. We went off which said it was only three linebackers. It's not our job to pay a player out because somebody else made a mistake. That's not how this racket works. "We paid all the Under 3.5 winners and that was that." The old adage says all good things come to an end. That certainly feels accurate considering we can no longer pick apart draft markets for six to eight weeks and take money from bookmakers who have no means of defense. Draft betting as we once knew it is dead. "It wasn't worth the time and energy," Andrews said. "We're not gonna win, and I'm gonna wind up pissing off my players no matter what happens." "I'll watch the draft on TV, but I'll sleep like a baby." Sam Panayotovich is a sports betting analyst for FOX Sports and the BetMGM Network. He previously worked for WGN Radio, NBC Sports and VSiN. Follow him on Twitter @spshoot. Want great stories delivered right to your inbox? Create or log in to your FOX Sports account, and follow leagues, teams and players to receive a personalized newsletter daily!
Fox Sports
23-04-2025
- Sport
- Fox Sports
Oddsmakers don't miss business of booking NFL Draft: 'I'll sleep like a baby'
When the prehistoric Professional and Amateur Sports Protection Act (PASPA) was finally struck down in May 2018, it paved the way for legalized sports betting across America as we know it today. Sure, you could bet on games and events like the NFL Draft in Nevada before the Supreme Court's ruling, but you couldn't log into your mobile betting app and wager from your couch in Illinois or New York or Pennsylvania. Sportsbooks started launching left and right and all those books fought for customers. Man, I miss the days when a sportsbook would offer you a $1,000 "risk-free" bet just for signing up. Some offers were bigger. Those were the days. Sportsbooks also found themselves competing in the realm of creativity. Shops like BetMGM, Caesars, DraftKings and FanDuel decided it was better to have more markets to entice customers to wet their beaks. The more options, the more action. This made the 2019 NFL Draft a damn free-for-all. It was the first time you could bet on the draft outside Nevada, and I vividly remember stories of bettors driving or flying to different states to whack mispriced markets. Draft position totals were posted in early March, some places posted head-to-head matchups, and long shots were plentiful along the way. Problem is, bettors were getting sound information before the sportsbooks and blasting sharp wagers at decent limits. In those days, you could see a player go from Under 13.5 -115 to Under 13.5 -600 on a random Tuesday. The books took a bath in 2019 on things like T.J. Hockenson going exactly eighth overall and Dexter Lawrence falling outside the top 10. You just knew it couldn't last forever. Longtime Las Vegas bookmaker Chris Andrews shut down NFL Draft betting a couple of years ago as head honcho at the South Point. He offered draft markets for years but got sick and tired of seeing red on the spreadsheet. I'm sure deep down he misses booking it. "Oh my God, no," Andrews told FOX Sports over the phone. "It was never what we should've been doing as bookmakers. There's always somebody that knows what a team is going to do in the draft. There's always a leak somewhere. And if the leak gets to the right wise guys, you're dead." Fascinating, isn't it? "It's also not a contest," Andrews continued. "It's not a game between the Phillies and the Mets, and you're handicapping which team you think is better that day. The draft has nothing to do with that. It's all about who gets the information first and people that got it before we did won every year. "There was nothing I could do about it." Draft markets are few and far between in Vegas. South Point and Golden Nugget didn't offer any menus, the Westgate offered one-day, $500 limits for six hours this past Tuesday and Circa booked $300 limits for a week. It's clear the headaches just weren't worth it. "Several years ago, we went up with a prop on how many linebackers would go in the first round," Andrews recalled. "We put up [O/U] 3.5. Three linebackers ended up going, but one of the big offshore outfits paid out four by mistake. "A couple guys came to me and said they had Over 3.5 and this book paid Over so we should do the right thing, too. We went off which said it was only three linebackers. It's not our job to pay a player out because somebody else made a mistake. That's not how this racket works. "We paid all the Under 3.5 winners and that was that." The old adage says all good things come to an end. That certainly feels accurate considering we can no longer pick apart draft markets for six to eight weeks and take money from bookmakers who have no means of defense. Draft betting as we once knew it is dead. "It wasn't worth the time and energy," Andrews said. "We're not gonna win, and I'm gonna wind up pissing off my players no matter what happens." "I'll watch the draft on TV, but I'll sleep like a baby." Sam Panayotovich is a sports betting analyst for FOX Sports and the BetMGM Network. He previously worked for WGN Radio, NBC Sports and VSiN. Follow him on Twitter @spshoot. Want great stories delivered right to your inbox? Create or log in to your FOX Sports account , and follow leagues, teams and players to receive a personalized newsletter daily! recommended Get more from National Football League Follow your favorites to get information about games, news and more
Daily Mail
22-04-2025
- Business
- Daily Mail
Prediction markets, shock alliances, and the 'backdoor' to legal sports wagering: Gambling's national turf war
It's been seven years since the US Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), thereby giving 49 states the right to follow Nevada in legalizing sports gambling. But for as pervasive as the industry has become across all media, sportsbooks are still banned in 21 states, including California and Texas, where a fifth of all Americans reside. Enter event-based prediction markets — a new front in gambling's nationwide turf war that's giving all Americans, 18 and up, the chance to wager on sports over the objections of state regulators. The emerging industry's trading platforms work like online sportsbooks by offering futures contracts at prices and returns that fluctuate like betting odds (i.e. underdogs pay off better than favorites). Customers are given binary choices ('yes or no' or 'one or the other') on any number of positions, from gas prices to the next Pope and, of course, sports: Will the Celtics win this year's NBA title? etc. Platforms like Kalshi and Polymarket made news during the 2024 US Presidential race by using customers' wagers to accurately forecast Donald Trump 's electoral victory over Kamala Harris. Since then, the industry has faced cease-and-desist orders in six states as platforms have taken hundreds of millions of dollars in bets on everything from March Madness to the Masters. Crucially, these websites consider themselves to be 'exchanges' rather than 'sportsbooks.' As a result, they face fewer taxes and are more widely available because they're not being prohibited, or even regulated, by individual states. Rather, prediction markets are under the federal jurisdiction of the Commodity Futures Trading Commission (CFTC) — something Nevada state senator Dina Titus sees as a 'backdoor way' to legalizing sports gambling without necessary safeguards. But if you're expecting critics of online sportsbooks to protest these providers, think again. Instead, the prediction markets have found an ally in reformers like the powerful Campaign for Fairer Gambling, not to mention Donald Trump Jr. and his father's pick to lead the CFTC, Brian Quintenz, both of whom have ties to Kalshi. 'I'm not saying there should be predictor markets,' Derek Webb, a former professional poker player and founder of the Campaign for Fairer Gambling (CFG), told 'I'm saying it's already there. It's existing. Am I going to oppose it? I'm not going to spend my time opposing it… I'm going to say if it happens and if it's finally legal, let me see if there's any way I can influence it to be better than it would be if I wasn't there to influence it.' The inventor of Three Card Poker, who has made millions licensing that product to brick-and-mortar casinos, Webb's impact as a gambling reformer has been felt on both sides of the Atlantic. Prior to the CFG's recent efforts in the US, the campaign successfully pushed to reduce the top bets on UK slot machines from ₤100 to ₤2. Along with another member of the CFG, recovering gambling addict-turned-campaigner Matt Zarb-Cousin, Webb helped launch the self-exclusion software, Gamban, which players can use to protect themselves from the dangers of online betting. Gamban has since partnered with online sportsbooks like FanDuel, which now offers its own responsible gaming dashboard, referred to as 'MySpend.' Another top online sportsbook, DraftKings, has its own version, 'Stat Sheet,' but both online tools work to reduce harm by tracking players' activity, trends, deposits and withdrawals, as well as net profits and losses. Believing more needed to be done, the CFG 'proudly' endorsed the GRIT Act, which seeks to treat problem gambling as a national health concern with the use of tax proceeds from the industry. That bill was first sponsored in the senate by Connecticut Democrat Richard Blumenthal and aims to funnel between $50 million and $100 million to states for fight gambling addiction. Months later, Webb slighted sportsbooks by telling the Washington Post: 'You put the most addictive behavior [gambling] on the most addictive device [mobile phones]. What could go wrong?' That quote has since been included in the city of Baltimore's lawsuit against FanDuel's parent company, Flutter Entertainment, and DraftKings, both of which are being accused of targeting problem gamblers. DraftKings has declined to comment publicly on the lawsuit, while FanDuel has released a statement without specifically addressing the city's claims: 'We are confident the company operates in accordance with all laws, including those established and enforced by the state of Maryland's Lottery and Gaming Control Commission.' Where prediction markets are concerned, Webb sees illegal, unregulated websites as the real problem facing gamblers. And with the CFTC planning a yet-to-be-scheduled roundtable on the subject, Webb & Co. have penned an open letter publicly requesting a seat for what promises to be a consequential discussion. As Webb told he supports the prediction markets' move under the commission's oversight in order to squash the black market, uphold regulated gaming practices and protect consumers. 'It isn't that we support the totality of the gambling landscape,' Webb said. '[It] includes illegal predictor markets that is not the markets under the CFTC. So it's important to address the majority of the harm. The majority of the gambling harm in the United States is online, rather than bricks-and-mortar [casinos], and the majority of it relates to the existing illegal market using existing products, existing content, the offshore illegal market that's targeting Americans.' But that argument isn't sitting well with some industry insiders, who are struggling to reconcile Webb's permissive stance on prediction markets with the CFG's efforts to combat addiction. On one hand, he's keenly aware of the dangers of online gambling, particularly when it can be done over a mobile phone. Yet, Webb and the CFG are supporting online prediction markets that are effectively legalizing sports gambling across all 50 states. And unlike most forms of sports gambling, which require customers to be at least 21, prediction markets are open to anyone older than 17. 'I don't know how they can square their position of being pro reform yet at the same time, essentially open the door to 50-state online sports betting without any meaningful regulation or oversight,' industry consultant John Pappas told 'I was shocked by their recent letter in support of these markets.' Webb denies supporting the unregulated expansion of sports prediction markets, telling 'If I get a seat at the [CFTC roundtable], then I can have that conversation.' For his part, Webb insists he is not profiting off of his efforts: 'Nobody pays me anything. I'm doing this philanthropically.' But some industry insiders remain skeptical about Webb's efforts. 'So you've got to wonder, is there an ulterior motive in what they're doing?' Gene Johnson, the executive vice president of Victor Strategies and gambling industry insider, told 'Because it really doesn't seem that it's benefiting the gamblers.' Victor Rocha, Johnson's business partner and the conference chair of the powerful Indian Gaming Association, put a finer point on it in February. On X, Rocha took aim at Webb, the CFG and Brianne Doura-Schawohl, an industry consultant and reformer who works with both the campaign and Underdog, a daily fantasy sports website. 'Derek Webb, Brianne Doura-Schawhol, & the Campaign for Fairer Gambling are supporting the Prediction Markets?' Rocha asked. 'This is why I think the responsible gaming industry is a joke. They're all selling something and it isn't responsible gambling.' Doura-Schawhol did not specifically address queries over potential conflicts of interest, but instead offered a more general explanation about the CFG: 'The Campaign for Fairer Gambling is not anti-gambling, the Campaign seeks to advance policies that protect consumers, including a more robust federal oversight of the sector.' Kalshi and other providers such as Robinhood remain undeterred after receiving cease-and-desist orders in Nevada, New Jersey, Illinois, Maryland, Ohio, and Montana. 'Event contracts offered by Robinhood Derivatives are federally regulated by the CFTC and offered through CFTC-registered entities, assuring that retail customers can access these prediction markets in a safe and regulated manner,' a Robinhood spokesperson told in a statement. 'As a result, we do not believe these contracts run afoul of state laws.' Other providers are fighting back too. Kalshi recently sued Nevada and New Jersey, similarly insisting the platforms are 'not a sportsbook,' but 'an exchange' that is 'overseen by the Commodity Futures Trading Commission (CFTC).' The distinction is that, unlike sportsbooks, exchanges like Kalshi and Robinhood are not serving as the 'house' or a traditional sportsbook. Rather, they're connecting participants on both sides of the futures contract and profit off fees, all of which puts the markets, tentatively, under the CFTC's jurisdiction. President Donald Trump's nomination of Quintenz, a Kalshi board member and prediction-market supporter, suggests the move could become permanent for the CFTC. Originally nominated by Barack Obama in 2016, Quintenz was renominated by Trump in 2017 and led the commission until 2021. He has since been involved with Kalshi and Andreessen Horowitz's crypto fund, leading to waves of ethical questions. Politico recently reported that Quintenz would step down from Kalshi and his crypto fund if appointed to lead the CFTC. A CFTC spokesperson declined to comment to on any potential conflict of interest for Quintenz, citing the fact that he hasn't been confirmed with the commission yet. Similarly, a Kalshi spokesperson also declined to comment on the nominee, while Quintenz did not respond to messages from Despite support from reformers and the Trump administration, prediction markets still carry many of the same risks as sports wagering. So, it should come as no surprise to see social media posts like 'Lost it all… $3,000 lesson' or 'cute, I'm down $10K' on Reddit's Kalshi page. Major League Baseball also sees the risks of sports prediction markets as being similar to those posed by online sportsbooks. In a letter dated to the CFTC dated March 7, MLB's executive vice president of legal and operations, Bryan Seely, implored the commission to create 'integrity framework' around sporting events contracts. 'As the resemblance between sports event contracts and traditional sports betting markets continues to grow, so too does the need to replicate the integrity and consumer protections that exist at the state level,' he wrote. 'Currently, those protections are lacking.' As for a resolution to this conflict, many, including Pappas and Webb, believe it will play out in the courts. However, Johnson sees this as a 'done deal,' both because of the looming presence of the President's oldest son as Kalshi's strategic advisor and because sportsbooks like DraftKings and FanDuel can simply adopt the exchange model to gain access to lucrative markets such as California. 'It's a huge flash point,' Johnson said. 'If you go back to 2022 in California, you had a tremendous fight between proponents of mobile sports betting and the Indian tribes. Half a billion dollars was spent on both sides. Three different referendums were proposed, and in the end, none of them passed, and the public was left with a lower opinion of sports betting after the fight. 'This is all a political fight over whether sports betting should be legal in California,' he added. 'Well, now we don't have to have that fight, because it's happening.' The risk, Johnson explained, is denying voters autonomy while removing states' ability to regulate the gambling industry on their own terms. 'The feds have a long history of messing things up in terms of gaming regulation,' he said. 'So most people in the industry, at least those with the experience that I have, would prefer the federal government not to get involved. Basically, one size probably doesn't fit all.'
Forbes
15-04-2025
- Sport
- Forbes
Kalshi's Nevada Court Win May Be Short-Lived Due To Federal Wire Act Ban On Sports Betting
(Photo by Mario Hommes/DeFodi Images via Getty Images) Congress has not been shy when it comes to setting a clear federal policy on the subject of sports gambling. In every instance, it has done so explicitly – starting with the Wire Act of 1961 , which prohibits the interstate transmission of wagering information related to any 'sporting event of contest' (a ban which is still in effect), and further exemplified by the Professional and Amateur Sports Protection Act of 1992 (PASPA), which, until its demise in 2018, prohibited state-authorized sports wagering. The Third Circuit referred to these two laws as exemplifying a 'federal policy of disfavoring sports-gambling.' Sports gambling is also specifically addressed in a number of other federal statutes, including the Sports Bribery Act, the Wagering Paraphernalia Act, and the Federal Wagering Tax Act. When Congress wants to address sports gambling, it barges in through the front door. No beating around the bush or reading between the lines on such an important subject. Indeed, as the Senate Report on PASPA proclaimed, 'Sports gambling is a national problem.' Expressing concern 'about the potential effect of legalized sports gambling on America's youth' – and noting that of the 'approximately 8 million compulsive gamblers in America, 1 million of them are under 20" – the Senate Judiciary Committee stressed that 'governments should not be in the business of encouraging people, especially young people, to gamble.' An 'implied' federal regulation of sports wagering? Against that backdrop, you can imagine my utter surprise to learn that more than 15 years ago – when PASPA was still in effect (and so, too, was the Wire Act) – Congress silently approved wagering on sporting events in all 50 states for any U.S. resident 18 years of age and older (which is the minimum age for trading in Kalshi's 'sports-related' event contracts). FEATURED | Frase ByForbes™ Unscramble The Anagram To Reveal The Phrase Pinpoint By Linkedin Guess The Category Queens By Linkedin Crown Each Region Crossclimb By Linkedin Unlock A Trivia Ladder But that's essentially what a Nevada federal court did last week when it held that Congress preempted Nevada's entire sports gambling regime by implication when it vested the CFTC with 'exclusive jurisdiction' under Section 2 of the Commodity Exchange Act over all futures contracts traded on CFTC-regulated exchanges. As the court noted, the CEA was amended in 2010 to create a 'special rule' for event-based contracts (such as Kalshi's sports and political offerings). Under this special rule, exchanges such as Kalshi can 'self-certify' their event contracts and begin offering them for trading immediately without CFTC approval. But, under the special rule, the CFTC can review and prohibit certain event contracts if it determines that those contracts are contrary to the public interest for any one of six listed reasons, such as when they involve 'activity that is unlawful under any Federal or State law' or 'gaming.' The 'special rule' created by the 2010 CEA amendment is at the crux of the Nevada and New Jersey lawsuits. Based on Kalshi's 'self-certification' of its 'sports-based' event contracts and the absence of any action taken by the CFTC to prevent Kalshi from offering such contracts, the court declared that 'at this point in time, federal law allows Kalshi to offer . . . sports . . . contracts on its exchange.' According to the court's reasoning, Section 2's 'exclusive jurisdiction' language reflects Congress' intent 'to occupy the field of regulating CFTC-regulated exchanges and the transactions conducted on those exchanges.' Because Kalshi is a CFTC-regulated exchange and was following the 2010 special rule for its 'sports-based' event contracts, the Nevada federal court ruled that Kalshi is subject to the CFTC's exclusive jurisdiction under the CEA and that, as a consequence, all state gambling laws are 'field preempted.' As such, Nevada's gaming regulators '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 court determined. The notion that Congress had already vested a federal agency with exclusive jurisdiction to regulate sports wagering on a federally-regulated commodities exchange – and did so prior to the commencement of the PASPA litigation in 2012 – would certainly have been welcome (if not shocking) news to the professional sports leagues, the NCAA and U.S. Department of Justice, which were on the losing side of Murphy v. NCAA because there was no federal statutory regime in place to regulate sports wagering; just a prohibition (i.e., PASPA) directed at state governments. They might have won the Murphy case if only they had known about the CFTC's exclusive jurisdiction to regulate futures contracts on commodities exchanges. That premise is as ridiculous as it sounds. Even Kalshi recognizes that – or at least it did in a prior litigation with the CFTC – when it asserted in an appellate brief filed with the D.C. Circuit that 'Congress did not want sports betting to be conducted on a derivatives exchange.' Looking ahead to a possible appellate treatment of this issue, it is worth noting that the D.C. Circuit observed that the CFTC would be 'ill-suited' to investigate 'suspected manipulation' of political event contract markets given its 'historic mission and mandate.' The need to safeguard event integrity is even more pronounced with sporting events, which have a well-chronicled history of match-fixing. However, as Major League Baseball pointed out in a recent letter to the CFTC, 'those protections are lacking" with 'sports-based' event contract markets: If we've learned anything from over 60 years of federal policymaking on sports gambling, it's that when Congress acts in this area, it does so explicitly (and usually with great fanfare) – as evidenced by the Wire Act and PASPA – such that it borders on the absurd to think that Congress would ever green-light federally regulated sports wagering solely by implication and have it overseen by an agency which lacks the requisite subject-matter expertise, especially after devoting more than a half-century of federal policymaking to disfavoring that activity. But, wait, what about the Wire Act? But there's an even bigger problem – Kalshi's 'sports-outcome' event contracts (or whatever other euphemism you prefer) are not even legal under federal law. Ever hear of the Wire Act? And therein lies the rub. The Court equated 'legal under federal law' (with the revealing qualifier – 'at this point in time') solely with regard to whether the procedural mechanics of the special rule were satisfied. The court did not undertake any independent analysis of whether Kalshi's sports offerings were legal under other federal laws, such as the Wire Act. And why didn't the court address something as obvious as the Wire Act? Because, incredibly, the Nevada Attorney General never raised it. (That's the problem you get sometimes when you keep the litigation in-house instead of farming it out to a law firm with experience handling complex federal issues. Do you think New Jersey would have prevailed in Murphy v. NCAA without the contribution of Ted Olson and his team at Gibson Dunn?). The Wire Act prohibits anyone 'engaged in the business of betting or wagering' from 'knowingly us[ing] a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers . . . on any sporting event or contest[.]' 18 U.S.C. § 1084(a). The federal courts of appeal have uniformly held that the Wire Act applies to sports gambling activity over the Internet. This is best exemplified by New Hampshire Lottery Commission v. Barr, where the First Circuit held that 'the prohibitions of section 1084(a) apply to the interstate transmissions of wire communications relating to any 'sporting event or contest.'' Kalshi's sports-related event contracts fall squarely within the Wire Act's prohibitions. First, its exchange is 'available to users nationwide.' As Kalshi's Head of Markets, Xavier Sottile, explained in a court declaration, '[t]raders on either side of a contract are often from different states given that Kashi does not distinguish between the geographic location of traders.' Despite using the word 'bet' throughout its promotional materials, Kalshi insists that it is not offering a gambling product. Instead, Kalshi describes itself as a 'financial exchange' where 'traders enter into contracts with other traders,' as opposed to betting 'against the house' (as typically occurs with a casino or sports book). But that is a distinction without a difference, as 'peer-to-peer exchanges' are included within many state sports wagering regimes. One such exchange, Sporttrade, holds gaming licenses from several states, including New Jersey. The Wire Act does not distinguish between bookmakers and exchanges. In United States v. Corrar, a Georgia federal district court explained that 'if Congress sought only to criminalize bookmaking, 'being engaged in the business of betting or wagering' – the actual language used in the Wire Act – 'would simply read 'receives bets or wagers.'' The inclusion of the word 'business' in front of 'betting or wagering' connotes a broader scope of activities, the court added, since no business is comprised of 'a single job,' but, rather, entails a 'division of labor.' Using the film industry as an analogy, the court made the following observation: The Corrar court also pointed to United States v. Cohen as an example of a successful Wire Act prosecution where the defendant was not the actual bookmaker personally accepting bets or wagers, but, instead, was a middleman 'farming out the actual receipt of bets to others.' CFTC Rule 40.11(a)(1)'s blanket prohibition But that's not at all. Nevada also inexplicably omitted the low-hanging fruit of Rule 40.11, adopted by the CFTC in 2011. Rule 40.11(a)(1) places a blanket prohibition on event contracts that 'involve[], relate[] to, or reference[]' any of the following: 'terrorism,' 'assassination,' 'war,' 'gaming,' or 'an activity that is unlawful under any State or Federal law. As explained by acting CFTC Chairman Caroline D. Pham: Kalshi seems to agree with that premise. In a prior federal court lawsuit against the CFTC – which is still on appeal – Kalshi affirmatively represented to the D.C. Circuit that '[i]f trading a contract violated a 'federal' law, that instrument would be banned regardless of the Special Rule. Congress did not authorize public-interest review of already-illegal instruments.' The 'federal law' violation here would be the Wire Act. In addition, Rule 40.11(a(1) prohibits event contracts involving 'gaming.' With Kalshi already on record as equating 'gaming' with sports betting, it's game over. Talk about a missed opportunity. Two of them, in fact. But all is not lost. Nevada can still raise these issues There is still an opportunity for Nevada to inject these overlooked federal issues into the case. It is important to remember that Nevada has yet to file its official response to the complaint. That is not due until April 23rd. Further, the court is holding a status hearing on April 30th. Remember, the court did not close the door on reconsidering its prior ruling, stating only 'at this point in time, federal law allows Kalshi to offer . . . sports . . . contracts on its exchange.' So, there's still time for Nevada to rescue victory from the jaws of defeat. In its upcoming answer (or motion to dismiss), Nevada can assert that Kalshi's sports-based event contracts 'involve' or 'relate to' activity that is barred by federal law (i.e., the Wire Act) and indisputably involve 'gaming' (i.e., wagering on sporting events), rendering them a nullity under CFTC Rule 40.11(a)(1)'s blanket prohibition, which, in turn, would avoid the preemptive effect of the CEA. Along the same lines, Nevada can also argue that the very existence of the Wire Act – along with PASPA (which was still in effect when the special rule was enacted in 2010) – belies any suggestion that Congress intended to 'field preempt' the sports gambling regimes of every state when it vested the CFTC with 'exclusive jurisdiction' over trading on CFTC-regulated exchanges where such activity would have contravened the longstanding federal policy against sports betting. And this is also where Nevada can use Kalshi's own prior judicial admissions against it, such as its blanket statement to the D.C. Circuit that 'Congress did not want sports betting to be conducted on derivatives markets.' And there's nothing stopping Nevada from raising these same issues in a brand-new motion for a preliminary injunction (along with a request that the prior injunction order be vacated), potentially clearing the way for Nevada to immediately enforce its gaming laws against Kalshi.
Reuters
21-02-2025
- Sport
- Reuters
U.S. sports betting soars 23.6% amid alarming rise in addiction
February 21 - Americans are gambling on sports in record numbers, which has coincided with a rapid increase in the number of people turning to support for serious gambling addictions. The American Gaming Association reported a 23.6 percent rise in sports betting in the United States in 2024, with Americans placing $147.9 billion in sports bets. Several states reported massive increases in sports betting over the past year. Massachusetts saw it sports betting revenue rise 40 percent, while Illinois overtook New Jersey as the No. 2 state for sports betting revenue behind only New York. Along with the skyrocketing dollars Americans are spending on sports betting has come an increase in the rates of gambling addiction -- and the services available to those who are seeking help. It has been seven years since the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA), clearing the way for legalized sports betting throughout the United States. Some form of sports betting is now available in 38 states along with the District of Columbia. As accessibility has increased, so, too, has the popularity and normalization of sports betting across the country. Gambling-specialized treatment provider Birches Health told Field Level Media on Friday that there have been "notable findings in the past year around the societal impacts, including rates of gambling addiction." Among states that release public reports around call volume to their gambling hotlines, Virginia saw a 973 percent increase in the number of helpline callers between 2019-2023, while Florida reported a 138 percent rise in outreach during the state's first two months after sports betting was made available. New Jersey reported a 277 percent increase in helpline outreach since the state legalized sports betting in 2018. The state now allows online casino games. According to Birches, the gambling addiction rate in New Jersey-based males between 18-20 years old is around 10 percent -- the national average is approximately 3 percent. Along with the increase in addiction, recent research suggests that legalized gambling has led to increases in irresponsible spending, bankruptcy rates related to gambling debts and higher rates of criminal activity, including intimate partner violence. "We've recently seen an alarming influx of young male bettors across the U.S. seeking assistance for serious gambling problems," Birches Health founder Elliott Rapaport told Field Level Media. "Even in states where sports betting has not been legalized, they are easily finding ways to bet on sports and play online casino games using unregulated platforms, which of course is very concerning." The AGA reported that U.S. sports betting revenue reached $13.71 billion in 2024, a 25.4 percent rise from the previous record set just the year before. And that's with two of the country's most populous states, California and Texas, having yet to legalize sports betting. "These past few years have reshaped the industry, and the revenue pie, and while it's much bigger, (it) looks very different than it used to," AGA vice president of research David Forman said in a state-of-the-industry call, per Front Office Sports. With revenue in the tens of billions and massive states yet to "come online" even as sports betting becomes more normalized by the year, it has sprouted an industry of companies in the support sector. In addition to Gamblers Anonymous, there are now a variety of online and in-person care options for those dealing with gambling addiction. Among them are Kindbridge Behavioral Health and Birches Health, which has a nationwide team of specially-trained counselors certified for treating gambling and gaming disorder. Virtual services can help remove traditional hurdles of travel inconvenience and costs, and treatment can be covered by insurance.
