Tribes-SBA consider Calif. sports betting plan

Welcome to iGB’s State of the Union: A Weekly Insight into North American Sports Betting Developments

Significant Developments in California Sports Betting

The recent convergence of industry leaders at the 2025 Indian Gaming Tradeshow and Convention in San Diego underscored the evolving landscape of sports betting in California, which stands as one of the most significant markets in North America. During the event, a key panel discussion featured insights from two of the foremost executives in the sports betting sector: Jason Robins, CEO of DraftKings, and Christian Genetski, President of FanDuel Group.

Delving into the critical need for collaborative relationships between gaming operators and tribal authorities, Robins emphasized the strategic importance of California’s economy, which rivals that of many nations. Despite the setbacks experienced in their previous efforts to launch sports betting in the Golden State in 2022, both Robins and Genetski remain optimistic about future opportunities.

“Maintaining robust ties to tribal gaming is crucial,” Robins noted. “California is pivotal for #DraftKings’ long-term growth.” pic.twitter.com/IIee66joGL

— Matt Rybaltowski (@MattRybaltowski) March 31, 2025

Following this, the Sports Betting Alliance (SBA) proposed a novel tribal collective market structure. This framework would facilitate the entry of national operators into California’s lucrative market, requiring participating sportsbooks—such as DraftKings and FanDuel—to assure annual minimum payments to the tribes, alongside revenue-sharing agreements. This initiative, originally disclosed by Casino Reports, reflects a significant step forward in negotiations.

Responses from tribal organizations, including the California Nations Indian Gaming Association (CNIGA) and the Tribal Alliance of Sovereign Indian Nations, indicate ongoing discussions to ensure all parties navigate the complexities of federal, state, and tribal laws effectively. “This requires thorough debate and careful resolution,” they stated in a joint communication on April 2.

Gaming Stocks Experience Market Volatility

The U.S. stock market recently faced its most challenging week since 2020, primarily triggered by rising tensions in international trade. The announcement of President Trump’s sweeping tariff strategy, termed “Liberation Day,” resulted in a significant decline in global stock values, causing over $5 trillion in losses within the S&P 500 by week’s end. Consequently, leading gaming stocks plummeted, with some experiencing declines of up to 15%—the steepest since the onset of the COVID-19 pandemic.

“Casino stocks are facing significant headwinds due to the market’s largest decline in years,” tweeted Gambling Insider, highlighting investor anxiety amid tariff announcements. https://t.co/AEPpVL5Ksq

— Gambling Insider (@G_Insider) April 4, 2025

Stocks tied to the Macau gaming market were particularly vulnerable; Wynn Resorts saw a 10.6% drop, while MGM Resorts fell by 9%. Analysts are increasingly concerned that high rollers might limit their international travel, potentially shrinking the frequency of visits to Macau.

The Impact on OSB and iGaming Stocks

As of April 4, the probability of an economic downturn in 2025 surged to 63%, raising alarms across various sectors—including online sports betting (OSB) and iGaming. Major players like DraftKings and Flutter experienced a 5% decline, reflecting broader market panic.

“Historical data suggests OSB/iGaming industries show resilience during economic fluctuations,” noted Craig-Hallum analyst Ryan Sigdahl. “Even in times of uncertainty, the appeal of low-stakes betting remains strong.”

With DraftKings shares currently sitting 41% below their all-time highs, some analysts stress the underlying growth narrative amidst this volatility, citing an impressive annual growth rate of 85% in their active monthly user base.

However, worries persist regarding how sustained inflation could impact consumer spending on entertainment options such as sports betting. Trump’s tariffs, equating to a significant tax increase, only exacerbate these concerns.

Midwestern States Take Regulatory Action Against Kalshi

As the Final Four approaches, two Midwestern states—Ohio and Illinois—have issued cease-and-desist orders against Kalshi, a prediction market platform. These orders stem from concerns that Kalshi’s derivative products potentially resemble illegal sports wagering.

Ohio’s order was issued on March 31, followed by Illinois, which also targeted other platforms like Robinhood and Crypto.com. The Ohio Casino Control Commission expressed particular concern over minors’ access to these contracts.

“Kalshi’s risk-taking could be pivotal in shaping the future of prediction markets, while Robinhood opts for caution,” remarked analyst Dan Bernstein regarding the differing strategies amidst regulatory pressures.

— Dan Bernstein (@dan_bernstein_) March 31, 2025

Kalshi has responded by initiating legal action against both New Jersey and Nevada. A significant hearing is scheduled for April 30, coinciding with a crucial roundtable hosted by the Commodity Futures Trading Commission (CFTC).

Kalshi’s Legal Counteroffensive

Kalshi CEO Tarek Mansour argues that regulatory bodies misunderstand the nature of their market offerings, which he contends are vital for maintaining the integrity of financial markets. “Our products leverage the sophisticated characteristics of free markets to promote unbiased information,” he asserted in a recent statement.

Moreover, Kalshi announced that Eliezer Mishory, the former chief regulatory officer, has accepted a prestigious role within the federal government, joining Elon Musk’s DOGE initiative at the SEC. Esteemed gaming attorney Daniel Wallach expressed optimism that sports event contracts will eventually gain CFTC approval, bolstered by previous regulatory discussions.

Hawaii’s Sports Betting Bill Advances

Despite its historic resistance to sports betting since the repeal of PASPA in 2018, Hawaii made significant strides this week. A senate committee approved HB 1308, a bill aimed at decriminalizing sports betting in the state. The proposal includes a licensing fee of $250,000 for operators and a projected 10% tax on revenues.

The bill has moved forward with support in the Senate, paving the way for a final vote before reaching Governor Josh Green’s desk. If passed, the legislation would permit up to four legal sports betting platforms throughout Hawaii and kick-start inquiries into how gaming tax revenues could bolster local economic development.

Governor Green remarked, “Public support is clear; two-thirds of our citizens are in favor as long as funds are allocated to key projects,” indicating a strategic approach to advancing the state’s gaming landscape.

Highlights and Insights from iGB

• Mississippi’s Bill to ban sweeps casinos falters, stalling online sports betting endeavors.
• BetMGM CEO Adam Greenblatt addresses concerns about market cannibalization.
• Nevada experiences a 9% decline in gaming revenue in February, largely influenced by the absence of the Super Bowl.
• Ohtani’s former interpreter is scheduled to report to prison following delays.
• Rei do Pitaco models its DFS platform after the U.S. sports betting landscape in Brazil.
• A report anticipates that U.S. gambling expenditures will reach $172 billion in 2024, predominantly in digital formats.
• Cybersecurity remains a priority, with IGA panel urging tribes to adopt proactive measures.
• Virginia’s sports betting holds approach near-record levels in February.

Discussions on the anticipated NHL Canadian rights deal sparked interest; however, a recent announcement from the league altered the timeline. https://t.co/IsP01VwEIp

— Steve McAllister (@StevieMacSports) April 3, 2025