Explore the rapidly evolving landscape of the online gambling industry in the United States. As regulatory frameworks shift and technology advances, this episode delves into emerging trends, challenges, and opportunities shaping the future of iGaming. Industry experts weigh in on how innovation and legislative changes are poised to transform the market, offering fresh insights for operators, players, and stakeholders alike.
Welcome to the 40th edition of Letter From America. This week, the “Kalshi Crisis” intensifies as the regulated betting sector teams up with state authorities, filing amicus briefs in the pivotal New Jersey case of Flaherty et al. vs. Kalshi. Meanwhile, Louisiana sees DraftKings and FanDuel roll out a new US$0.50 (£0.40) player surcharge per bet.
Industry Unites: The Amici Briefs Surge
Recap: Following the New Jersey Division of Gaming Enforcement’s (DGE) cease-and-desist order to Kalshi this past March, Kalshi swiftly secured an injunction allowing continued operation during ongoing litigation.
The game-changer now: New Jersey DGE is appealing this injunction-the first Kalshi case to advance to this critical stage. This opens the door for amicus curiae briefs, giving industry stakeholders a powerful voice alongside the litigants.
Since Tuesday evening through June 19th, an unprecedented coalition of 34 states, over 60 federally recognized Tribes, 9 Tribal organizations, and the American Gaming Association (AGA) have submitted amicus briefs.
The collective stance? Kalshi undermines established state laws and regulatory authority. The AGA highlighted the Commodity Futures Trading Commission’s lack of expertise and infrastructure to properly oversee sports betting markets.
Tribal leaders added that Kalshi’s approach violates the Indian Gaming Regulatory Act and existing compacts, posing a direct threat to Tribal sovereignty.
New York’s Bustling Fortnight
It’s been a whirlwind 14 days for the Empire State. Senate Bill S5935A, outlawing sweepstakes and targeting third-party providers, has passed both legislative chambers and now awaits the signature of Governor Kathy Hochul (D).
This bill aligns New York with Montana and Connecticut in crushing sweepstakes platforms, imposing fines ranging from US$10,000 to US$100,000 (£7,452-74,521) per violation.
On the land-based front, the New York State Gaming Commission’s Facility Location Board set two financial pillars for downstate casinos: a hefty US$500 million (£395 million) license fee and an equal minimum capital investment requirement.
Bids-subject to stringent zoning and environmental standards-are due by June 27, with licenses expected to be awarded before 2026 kicks off. Meanwhile, May brought fresh highs as New York smashed its gross gambling revenue (GGR) record at US$248.9 million (£196.63 million), a 22.1% leap year-over-year.
FanDuel maintained its grip on the top spot, with DraftKings trailing closely behind.
Betting Giants Fight Back
FanDuel and DraftKings pioneered new policies in Illinois this week, aiming to offset the financial blow of the state’s recently introduced betting levy.
The tax imposes a US$0.25 (£0.20) surcharge per wager on the first US$20 million (£15.8 million) handle, jumping to US$0.50 (£0.40) for wagers thereafter. Both operators are passing this directly onto players-effectively doubling the levy at US$0.50 per bet.
DraftKings CEO Jason Robins voiced his disappointment over lawmakers’ decisions to escalate taxes threefold in just two years, pledging to rescind the surcharge should the legislation be repealed.
This latest tax hike follows 2024’s sliding scale increase-raising rates from 15% up to 35-40% for operators surpassing US$100-200 million (£79-158 million) in adjusted gross receipts, hitting FanDuel and DraftKings hardest. Last year’s tax surge reportedly cost each over US$50 million (£39.5 million).
The burning question now: Will smaller operators leverage these surcharges to gain market advantage, or will others follow the lead of the betting giants?
New Jersey Smashes Records in May
New Jersey enjoyed a banner month in May, raking in a record US$246.8 million (£195.97 million) in online gambling GGR-contributing to a total US$614.7 million (£485.61 million) across all gaming verticals, a 20.5% year-over-year climb.
Land-based gaming surged to US$265.3 million (£209.59 million) in GGR, outpacing online for the first time in months with a 10.9% annual gain. Meanwhile, sports betting soared by 30.2%, delivering US$102.5 million (£80.98 million) in revenue.
Market leadership for online gaming and sports betting remained with FanDuel, with DraftKings holding steady in second.
