iGaming Weekly Recap (May 19–25, 2025): Kalshi Faces Another C&D Order After a Brief Respite

Representatives Brian Stewart and Marilyn John introduced House Bill 298 (HB298), aimed at legalizing online casinos (iGaming) in Ohio while banning sweepstakes. The bill, filed on May 20, 2025, targets an iGaming launch by March 31, 2026, under the oversight of the Ohio Casino Control Commission. HB298 opens the door to games like online slots, table games, and poker, but only for Ohio’s existing land-based casinos and racinos. Each operator may run one online platform, with a $50 million license fee for five years and a $10 million renewal. The state anticipates significant revenue, estimated at $400 to $800 million annually from a 28% tax, with 99% allocated to the state’s general fund and 1% to combat problem gambling. HB298 strictly prohibits online sweepstakes, redefining them as illegal gambling.

Arizona issued a cease-and-desist order to the prediction market platform Kalshi. The state, specifically the Arizona Department of Gaming (ADG), deemed Kalshi’s prediction markets illegal gambling. The ADG views Kalshi’s “event contracts,” which allow users to buy shares in outcomes like NBA games, as disguised bets. Under Arizona law, only licensed operators can conduct such activities, and Kalshi lacks a license, making its operations in Arizona illegal. ADG’s Director of Enforcement, Douglas Jensen, stated there’s no significant difference between buying a Kalshi contract and placing a bet with a bookmaker. The order demands Kalshi immediately halt all gambling-related activities in Arizona. Arizona is the seventh state to take action against Kalshi over sports event contracts.

In Maryland, Governor Wes Moore signed House Bill 352 (HB 352), also known as the Budget Reconciliation and Financing Act of 2025. The bill raises the tax on mobile sports betting operators from 15% to 20%. The new rate takes effect on July 1, 2025. The tax hike aims to address a $3 billion budget shortfall. The new rate is estimated to generate an additional $32 million in fiscal year 2026, allocated to education and state funds. Ninety-five percent of the tax revenue is directed to the Blueprint for Maryland’s Future fund. Governor Moore initially proposed a much higher rate of 30% or even 32%, but lawmakers settled on the compromise 20% rate. This was part of a broader budget plan involving cuts and other new taxes.

Robinhood has launched moneyline-style prediction markets for NBA and NHL playoff games through a partnership with Kalshi. These markets allow users to trade contracts on game outcomes, which, as stated, mimic traditional moneyline betting. Examples of games with available contracts include Timberwolves vs. Thunder and Indiana Pacers vs. New York Knicks in the NBA, as well as Florida Panthers vs. Carolina Hurricanes and Edmonton Oilers vs. Dallas Stars in the NHL.

In Minnesota, hopes for legalizing sports betting have once again fallen short. This marks the fourth consecutive year where, despite early momentum, opposition has blocked the passage of relevant legislation. Two main bills, SF 757 and SF 3414, which proposed legalizing retail betting at tribal casinos and mobile betting statewide, ultimately stalled in Senate committees. SF 757 received a tied 6-6 vote, halting its progress, while a motion to pull SF 3414 from committee also failed. Opposition, citing concerns about gambling’s social harms, including the addictive nature of online and live in-game betting, played a pivotal role. Critics also slammed the proposed licensing fees as potentially stifling competition and raised concerns about the negative impact on charitable gaming.

Bonus: Minnesota’s Déjà Vu

We don’t want to start on a pessimistic note, as the market typically emerges unscathed from its challenges. Still, last week’s events spotlighted the mounting obstacles facing the sports betting industry. Individually, these are mere pinpricks, but together, they paint a less rosy picture.

Maryland officially raised its sports betting tax. It’s hard to call this wholly bad news, given the initial proposal aimed for a 30% hike. The settled 20% feels reasonable, especially amid a nationwide trend of overly aggressive tax increase proposals. Yet, this marks the third tax rate hike since PASPA’s repeal (plus Connecticut’s tax model change), and given the current mood, the odds of more hikes in other states next year are high.

Minnesota, meanwhile, is far from tax hike talks, failing for the fourth straight year to pass sports betting legalization. The annual déjà vu strikes again, and we must repeat: legal betting in Minnesota will wait another year. This stagnation, paired with pro-tax-hike sentiments, looks grim against the rising power of prediction markets.

Arizona became the seventh state to issue Kalshi a cease-and-desist order (notably without a deadline), setting itself up for a lawsuit, while Robinhood expands its offerings via a Kalshi partnership. Meanwhile, the CFTC, meant to regulate this space, loses commissioners, and faith in its ability to address prediction markets is fading fast. Are prediction markets a threat? Opinions split: some point to their limited offerings, others warn parlays are inevitable. All agree, though, that their presence in states without legal sports betting has significant consequences.

What’s encouraging from last week? Ohio’s push to legalize online casinos is still alive. The state aims to ban sweepstakes in the same bill, attempting a rare feat. Success is far off, and several nuances pose real threats to the project. What will the next week bring? In this dynamic landscape, it’s hard to predict. But rest assured, the biggest moments will be covered in next week’s Weekly Recap.