iGB’s Weekly Digest: Key Developments in North American Sports Betting

CFTC Cancels Highly Anticipated Roundtable on Prediction Markets

In what was shaping up to be a pivotal event for the gaming sector, the US Commodity Futures Trading Commission (CFTC) decided to cancel its much-anticipated roundtable on April 30, aiming to discuss the regulation of prediction markets. Companies like Kalshi, Robinhood, and Crypto.com have transformed the landscape with their innovative event contracts related to sports, with Kalshi’s trading volume for March Madness surpassing an astonishing $500 million.

The abrupt cancellation blindsided stakeholders who had anticipated insights to clarify regulatory frameworks. A CFTC attorney stated, “more details will be provided when available,” yet no new timeline has been established for rescheduling this crucial meeting.

A notable CFTC official hinted at a potential restructuring of the forum into a broader hearing with representatives from various stakeholder groups, emphasizing the necessity of diverse viewpoints in discussions.

Legal Battles Intensify in Prediction Markets

The sudden halt in the CFTC’s proceedings leaves the future of prediction markets hanging. Recently, these platforms have faced a surge of cease-and-desist orders, raising questions about the regulatory landscape amidst a backdrop of state versus federal rights.

Kalshi has taken a proactive stance, initiating lawsuits in states like Nevada, where they secured a preliminary injunction allowing them to continue operations. Meanwhile, other states have intensified their enforcement actions against such platforms. The roundtable was initially intended to unravel the complexities surrounding derivatives in sports betting, as emphasized by CFTC interim chair Caroline Pham.

Stakeholders Voice Disappointment Over CFTC’s Decision

The industry’s reaction to the cancellation has been one of disappointment. A leading lobbyist expressed concern, describing the event as a critical opportunity for stakeholders to discuss perspectives and for the CFTC to gather necessary data for balanced decision-making. The roundtable was expected to address a multitude of complex regulatory issues, from state laws to federal statutes affecting sports betting.

Legislative Changes in Colorado Target Free Bet Deductions

In legislative news, Colorado has introduced a bill (HB 25-311) aimed at eliminating deductions for free bets, which could significantly alter the tax dynamics for sportsbooks. With the NBA Playoffs underway, this move seeks to repeal the deductions that have been utilized to decrease tax obligations for operators. Notably, the state anticipates that this change could generate an additional $11.8 million in revenue for its sports betting fund in FY 2025-26, although it might also lead to fewer free betting promotions.

As the Nuggets compete for the NBA Championship, their odds have dropped dramatically, causing excitement and concern among bettors.

RWLV’s New Compliance Leadership Amidst Regulatory Challenges

Resorts World Las Vegas (RWLV) has appointed Jennifer Roberts as its new chief compliance officer, marking a significant shift as the casino aims to revamp its compliance protocols. Roberts, a prominent figure in gaming law, will manage vital compliance issues, including anti-money laundering measures. This follows a hefty $10.5 million settlement against RWLV, marking one of the largest fines imposed by Nevada gaming regulators.

Dixon, the new CEO of RWLV, praised Roberts for her extensive experience and commitment to fostering a robust compliance culture.

South Carolina’s Sports Betting Hearing Adjourns Without Decision

In South Carolina, legislators held a nearly two-hour discussion on proposed sports betting bills before adjourning without voting on the issue. The hearings included debates over a proposed 12.5% tax on sports betting revenues—estimated to bring up to $31.3 million in revenue. Despite the financial potential, a coalition of religious organizations urged lawmakers to reject the bills due to rising concerns about problem gambling.

While states like Tennessee embrace sports betting, the Southeast remains largely resistant, with South Carolina’s Governor McMaster firmly opposing any movement towards legalization.

UN Report Highlights Criminal Links with Online Gaming

A new report from the United Nations Office on Drugs and Crime has raised alarms about the connections between online gaming and organized crime. The findings reflect a growing trend of transnational crime syndicates leveraging online platforms for illicit activities, with losses in Asia estimated at $37 billion.

The report calls for enhanced international collaboration to tackle money laundering and provide oversight to high-risk investment activities, especially as illegal betting operations continue to intertwine with online gaming.

Looking Ahead: Preventive Measures for the 2026 World Cup

With the FIFA World Cup on the horizon, U.S. senators have called for investigations into the potential criminal activities linked to online gaming. The UNODC revealed disturbing insights about laundered funds in illegal sports betting, prompting legislators to advocate for stringent regulations ahead of the event.

As discussions continue to unfold in various jurisdictions, stakeholders in the sports betting industry remain vigilant, navigating a landscape filled with both opportunities and challenges.

In Case You Missed It: Highlights from iGB

• Genius Sports announces partnership expansion with NCAA through 2032.
• Ontario’s igaming revenue reaches C$3.20 billion for 2024-25.
• Las Vegas Sands drops its bid for a casino in New York.

Be sure to stay informed as we track these developments in the dynamic world of sports betting!