There Is No Gambling News

While prediction markets generate controversy, sportsbooks keep attracting billions of dollars.

Welcome to the first edition of a monthly digest of news and policy analysis on gambling and gambling-adjacent topics. I say monthly, but there are never any interesting developments in the gambling world, so once per decade or so might be enough.

This digest is meant to provide a high-level overview for anyone who is fortunate enough not to follow gambling news every day. If daily news is more your speed, I recommend three newsletters that I relied on to compile this post: Straight to the Point from Steve Ruddock and the Event Horizon and the Closing Line, both from Dustin Gouker.

To the (nonexistent) news:

Americans like gambling (and, ahem, hedging financial risk) on soccer

One sportsbook executive pegged the amount bet in the U.S. on the World Cup as the equivalent of “10 Super Bowls.” Meanwhile, $40 billion was bet traded on Kalshi on the World Cup (not all from the U.S.).

Prediction markets are in the business of stepping on rakes, and business is booming

Day in the life of a prediction market

At this point, you have to wonder if it’s on purpose. Prediction markets remain front page news thanks to some scandals and some strange new products.

• A Wall Street Journal investigation showed Polymarket using a bunch of shady advertising practices, including using dummy websites so social media influencers could fake big wins and—without acknowledging that they were being paid—post about the “free” money they won. The CFTC, which (allegedly) regulates prediction markets, is investigating.

• President Trump’s teleprompter operator was caught betting on the words the president would say. Kalshi is patting itself on the back for catching him, even though he was only betting because the company created an economic incentive for him to do so. Also, who is going to pay back all the people who were on the losing end of the ill-gotten winnings?

• Kalshi paused a plan to offer contracts on airline delays but is setting up to allow bets on college conference realignment.

🙋AIBM Analysis: These gimmicky markets get headlines, but almost every dollar traded on Kalshi is on sports contracts (including combos, aka parlays) or crypto-related markets. These companies have not proven they are financially viable outside of sports.

Congress doing congressional things

A subcommittee of the U.S. House Agricultural Committee—the committee that oversees the CFTC, because the agency is supposed to be regulating pork belly derivatives, not Houston Astros parlays—held a hearing on prediction markets. This came a few days after a half-dozen Democratic members of Congress, with the support of one of the Kalshi CEOs, put out a bill requiring facial recognition for accessing prediction markets or sportsbooks, ostensibly to protect children. Lo and behold, the bill also includes language to make it easier for the CFTC to approve contracts related to “gaming.”

🙋AIBM Analysis: There have been a ton of proposed prediction market bills. It’s always a safe bet that a given bill won’t pass. But Congress is still important in shaping political narratives and in putting companies on notice.

In the meantime, states remain the battleground over prediction markets. Two bizarre situations are unfolding in the Midwest:

• Wisconsin: The state has an old law on the books that residents are not allowed to bet on an election in which they also vote, meaning someone who votes in Wisconsin cannot purchase an event contract on the outcome of that election. This is probably headed to court.

• Michigan: After a state court ordered Kalshi to stop offering sports events contracts, the CFTC demanded that Kalshi not comply with the order and told the company not to cancel any trades. So much for states’ rights.

The state of Washington also won an injunction against Kalshi for operating an unlicensed gambling site. The company is rapidly building a track record of taking Ls in court.

🙋AIBM Analysis: Congrats, as always, to the lawyers who get paid no matter what. But two states — Nevada and Michigan — appear to have found the formula. Don't just order Kalshi to stop; order it to hire a licensed third-party geolocation vendor and impose a daily fine larger than its revenue. Will other AGs copy the template well before the underlying jurisdictional question reaches the Supreme Court?

Don’t forget about good old-fashioned online sports betting

A bettor in Philadelphia lost $2 million after he claims he developed a gambling addiction. He is suing FanDuel and DraftKings (among others), and the Philadelphia Inquirer released a portion of a video with a personal shoutout from Philadelphia Phillies star Bryce Harper, allegedly commissioned for the bettor by his FanDuel VIP host. Harper has since issued a statement that he did not know what or who the video was for, or how it would be used.

🙋AIBM Analysis: The gambling *discourse* has been focused entirely on prediction markets, while sports betting is chugging right along, attracting billions in bets. My longstanding fear is that American politics and culture become inured to frictionless sports betting–as we have to the lottery, alcohol, and a bunch of other things. Are prediction markets accelerating that process?

New research

One of the landmark working papers on sports betting has been released in the Journal of Financial Economics. The paper finds that the spread of sports betting “does not displace other gambling or consumption but significantly reduces savings,” especially in low-income households.

Until next month

That’s it for this month’s nonexistent gambling news. The scandals will keep grabbing headlines. Meanwhile, gambling is becoming an ordinary, frictionless part of American life, while the costs, especially for households with the least money to spare, are becoming harder to ignore.