SharpRank’s weekly updates on Compliance, Audit, Legislation, Ethics, & Regulation within the Sports Betting Industry.
Topics 4/23/25:
- Kalshi files lawsuit against Maryland Lottery and Gaming Control Commission
- Arizona Cracks Down on Six Illegal Gambling Operators with Cease-and-Desist Orders
- Tennessee Regulator Calls on CFTC to Ban Sports Prediction Markets
- NCAA Division III Council Backs Loosening Rules on Pro Sports Betting
- Watchdog Warns U.S. Gambling Firms Are Undermining Addiction Safeguards
- New York Lawmaker Proposes Limits on Sports Betting and Advertising
- Dutch Trade Body Raises Alarm Over Illegal Gambling Growth in KSA Market
Kalshi files lawsuit against Maryland Lottery and Gaming Control Commission
Kalshi, a CFTC-regulated prediction market operator, has filed a lawsuit against the Maryland Lottery and Gaming Control Commission (MLGCC) in response to a cease-and-desist order issued earlier this month. The platform is seeking a temporary restraining order and preliminary injunction to halt the state’s enforcement action. Maryland is the sixth state to issue such an order against Kalshi, following similar moves by Nevada, New Jersey, and Ohio. Kalshi argues that its offerings fall under federal oversight via the Commodity Futures Trading Commission and should not be subject to state-level gambling restrictions. CEO Tarek Mansour expressed frustration over regulatory resistance, asserting the value and legality of prediction markets. The dispute highlights ongoing legal ambiguity over whether betting on event outcomes—such as sports or elections—should be governed by gaming or commodities regulations. The lawsuit is part of a broader battle that could reshape how prediction markets operate across the U.S.
Arizona Cracks Down on Six Illegal Gambling Operators with Cease-and-Desist Orders
On April 21, 2025, the Arizona Department of Gaming (ADG) issued cease-and-desist orders to six illegal gambling operators, including ARB Gaming LLC (Modo.us), Epic Hunts, Generiz, ProphetX, My Bookie, and BetUS.com.pa. These operators were found offering unlicensed gambling services such as online casinos and sweepstakes sportsbooks, which are not permitted under Arizona law. Although Arizona legalized sports betting in 2021, online casinos and iGaming remain illegal. The ADG has increased consumer protection efforts by issuing public alerts and maintaining a list of approved operators. The move also aligns with a broader national crackdown, as several states—including Ohio and Tennessee—target prediction market platforms and sweepstakes models that attempt to circumvent existing gambling regulations.
Tennessee Regulator Calls on CFTC to Ban Sports Prediction Markets
On April 17, 2025, the Tennessee Sports Wagering Council urged the Commodity Futures Trading Commission (CFTC) to ban federally regulated prediction markets offering contracts on sports outcomes. In a formal letter, the council asserted these contracts violate the Tennessee Sports Gaming Act, labeling them as illegal wagers that undermine the state’s regulatory framework. While Tennessee has not issued cease-and-desist letters like other states, it emphasized that prediction markets—often offering bets on player injuries, penalties, and college sports—lack consumer safeguards and regulatory oversight required of licensed sportsbooks. The letter also criticized these platforms for accepting crypto and credit card payments and failing to provide tools like self-exclusion and responsible gambling features. As legal clashes mount, companies like Kalshi continue to challenge state authority by asserting federal regulatory protection under the CFTC.
NCAA Division III Council Backs Loosening Rules on Pro Sports Betting
During its April 2025 virtual meeting, the NCAA Division III Management Council expressed support for legislation aimed at deregulating betting on professional sports. The council emphasized a harm-reduction approach by directing staff to explore “safe harbor” or limited immunity policies for student-athletes who engage in prohibited betting but seek help for problem gambling. Council Chair Jason Verdugo highlighted that such policies could foster openness among athletes in addressing gambling problems. The council also approved legislation to allow schools to pursue sponsorships with professional sports organizations and recommended an eligibility waiver pilot program that would permit certain athletes to compete while enrolled at a non-athletic partner institution. Furthermore, the council established a Coaches Connect Program to strengthen communication and governance engagement among Division III coaches. These initiatives await final action by the Presidents Council later this month.
Watchdog Warns U.S. Gambling Firms Are Undermining Addiction Safeguards
A new report by the Campaign for Accountability warns that major US gambling companies, including DraftKings, FanDuel, Caesars, and Penn Entertainment, have lobbied aggressively across multiple states to weaken or block consumer protection regulations meant to reduce gambling addiction. These efforts include opposing rules around advertising restrictions, bonus limitations, data privacy, and features promoting responsible gambling like play breaks or deposit caps. The report cites successful lobbying in states like Arizona, Virginia, and Maine, where proposals were dropped or amended in favor of the industry’s positions. While some states like Massachusetts and New York upheld stricter rules, others gave way to arguments that consumer protections would hinder revenue or innovation. The watchdog compares gambling’s regulatory challenge to the tobacco industry and stresses the urgent need for oversight, particularly to protect vulnerable populations from addiction-related harm. Gambling companies and trade groups responded by asserting their commitment to regulation, consumer safety, and contributing tax revenue.
New York Lawmaker Proposes Limits on Sports Betting and Advertising
On April 17, 2025, New York Assemblymember Robert Carroll introduced a sweeping sports betting reform bill that seeks to impose a $5,000 daily wagering cap, a five-deposit-per-day limit, and broad restrictions on sportsbook advertising. The bill prohibits advertising of bonus bets or odds boosts, and restricts ad placements during peak hours and live sports broadcasts. While proponents argue the bill promotes responsible gambling and financial health, critics warn that it could push high-stakes bettors to neighboring states like New Jersey, undercutting New York’s substantial tax revenue from legal betting. If passed, the legislation could serve as a model for stricter sports betting regulation across the U.S., especially given New York’s position as the nation’s largest sports betting market. The bill echoes stalled federal efforts and builds on similar—but less severe—ad restrictions recently enacted in states like Ohio and Massachusetts.
Dutch Trade Body Raises Alarm Over Illegal Gambling Growth in KSA Market
The Licensed Dutch Online Gambling Providers (VNLOK) trade body has raised concerns over the rapid growth of the illegal gambling market in the Netherlands following the Kansspelautoriteit’s (KSA) report showing a drop in the country’s legal gambling channelisation rate to just 50% in H2 2024. The KSA attributes the decline to the introduction of deposit limits in October—€700 per month for most players and €300 for those aged 18–25—which have driven high-stakes players toward unregulated platforms. While player losses in the legal market have declined, VNLOK argues that the drop reflects a shift in gambling activity to the black market rather than reduced gambling overall. The trade body calls for enhanced enforcement and monitoring, especially among young adults, who make up 22% of active gambling accounts despite being only 9.4% of the population. The Dutch government is currently reviewing gambling legislation, with debates ongoing around raising the minimum age for high-risk gambling activities to 21.
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