iGaming Weekly Recap (June 16–22, 2025): The Entire Industry vs. Kalshi

DraftKings launched its first federal Political Action Committee (PAC), becoming the first sportsbook to establish a federal PAC. The primary goal is to influence sports betting legislation and combat rising taxes and unregulated competition.

This move stems from several key challenges facing the company. First, DraftKings opposes rising taxes, arguing that such hikes push players toward illegal markets. Second, the company views unregulated prediction markets like Kalshi, Robinhood, and Crypto.com as significant threats, as they operate in all 50 states without state licenses or the high compliance costs borne by regulated operators, giving them a “competitive advantage.”

Louisiana Governor Jeff Landry signed HB 639, raising the online sports betting tax from 15% to 21.5%, effective August 1, 2025. The change aims to fund college sports and address the state’s projected budget deficit. Louisiana is the first state to raise taxes in response to the House v. NCAA settlement, which allows colleges to pay athletes for their name, image, and likeness (NIL). The tax hike is expected to boost Louisiana’s annual sports betting revenue by $24 million, from $70 million to $98.5 million.

The events of June 17 were quickly dubbed “Black Tuesday” for the sweepstakes industry by experts. The Louisiana Gaming Control Board (LGCB) took Governor Jeff Landry’s veto of a sweepstakes ban bill as a call to action. The LGCB issued a series of cease-and-desist orders to operators offering illegal gambling in the state, explicitly naming Harp Media B.V. (Bovada) and likely targeting sweepstakes operators as well.

That same day, the Mississippi Gaming Commission (MGC) sent cease-and-desist letters to ten offshore and sweepstakes operators, including VGW’s Chumba Casino. The MGC justified its actions, stating these firms violate state and federal law, and online casino-style games and sports betting are prohibited outside licensed casinos. Additionally, in New York, a sweepstakes ban bill introduced by Senator Joseph Addabbo passed the State Assembly, putting New York one governor’s signature away from becoming the fourth state to outlaw sweepstakes. New York had already taken decisive action when, on June 9, Attorney General Letitia James shut down 26 illegal online casinos.

PENN Entertainment shareholders backed HG Vora Capital’s board nominees in a contentious proxy battle, resulting in the election of two HG Vora candidates, Johnny Hartnett and Carlos Ruisanchez, to the board. The vote, with over 55% supporting HG Vora’s proxy card, reflects growing discontent with PENN’s stock price and strategy. HG Vora criticized the status quo as “unacceptable.”

Shareholders also expressed dissatisfaction by rejecting executive compensation packages, with over 60% voting against the “Say-On-Pay” proposal. HG Vora specifically called out CEO Jay Snowden’s $26.7 million 2024 compensation as excessive given the company’s struggles. A key point of contention was PENN’s digital strategy, which HG Vora labeled “value-destructive.” As a result, with two nominees on the board, HG Vora aims to push for cost discipline and potentially sell or shutter digital assets to refocus on PENN’s core casino business.

BetMGM significantly raised its 2025 financial outlook, now expecting at least $2.6 billion in revenue (up from $2.4–$2.5 billion) and $100 million in EBITDA (previously projected to break even). This optimistic forecast is driven by strong growth in Q1 2025, with revenue up 34% year-over-year to $443 million and EBITDA at $22 million, a major improvement from a $132 million loss in Q1 2024.

Key to this growth was increased player engagement and betting volumes, particularly in online sports betting, where revenue surged 68% year-over-year in Q1, and iGaming (online casinos), which saw a 27% increase. BetMGM attributes its resilience and success to refined products, a disciplined strategy, and targeted customer acquisition.

Bonus: United Against Kalshi

Last week, we witnessed unprecedented unity in the gambling industry, which banded together against Kalshi. Over 100 entities filed amicus curiae (“friend of the court”) briefs with the U.S. Court of Appeals for the Third Circuit, outlining a wide range of issues with Kalshi’s operations. We covered this in detail in our article, “Gambling Industry Unites Against Prediction Markets: Can Kalshi Weather the Coming Storm?”, which we highly recommend reading. In today’s Weekly Recap, here’s a quick tl;dr.

In recent months, state regulators took action against Kalshi for the first time, issuing cease-and-desist orders. Kalshi ignored these and took the matter to court, securing an initial victory in Nevada. While the process went smoothly in Nevada and New Jersey, Judge Adam Abelson in Maryland began asking tougher questions, complicating things.

The situation escalated in New Jersey, where the Attorney General appealed a lower court’s decision granting Kalshi a temporary injunction, opening the door for third parties to file amicus curiae briefs.

As a result, over 100 entities flooded the Third Circuit with amicus briefs. This impressive list includes:

• Attorneys General from 34 U.S. states and territories
• Native American Tribes (including 60 tribes and the Indian Gaming Association)
• American Gaming Association (AGA)
• Casino Association of New Jersey (CANJ)
• Advocacy groups like Stop Predatory Gambling, Association of American Physicians and Surgeons, Texans Against Gambling
• New Finance Institute (NFI)

The briefs present a comprehensive case, painting a clear picture of the regulated gambling industry’s issues with prediction platforms. Key points include:

• Kalshi’s operations could undermine key court rulings and threaten state tax revenue from regulated gambling.
• Kalshi’s model is called a “too-clever” attempt to bypass gambling laws, functioning as an online casino.
• Kalshi’s marketing, which repeatedly frames its product as betting, reveals its true intent.
• The CFTC lacks the expertise, infrastructure, or tools to effectively oversee sports betting markets, unlike state gambling regulators.
• The CFTC’s inaction in taking a formal stance and allowing Kalshi’s self-certification of contracts created a “regulatory gap,” enabling illegal betting.
• Kalshi’s operations threaten tribes’ sovereign rights to regulate gambling on their lands, violating the Indian Gaming
• Regulatory Act (IGRA) and causing financial losses to tribal economies.
• Platforms like Kalshi could cause “massive public harm,” intensifying gambling addiction, especially among youth, due to lax safeguards (e.g., an 18+ age limit instead of 21+, no addiction prevention measures, or marketing restrictions).
• Ethical concerns surround Brian Quintenz, a Kalshi board member and future CFTC chairman, raising fears of a conflict of interest.

The unity of these entities, often at odds, is striking and rare. The briefs are coherent, addressing genuine, significant issues beyond the purely financial concerns previously debated in court cases.

The CFTC’s inaction and the current legal battle create an untenable stalemate, demanding urgent resolution. The question remains: Can Kalshi withstand this concerted onslaught?