The U.S. sports betting world moves quickly and unpredictably in 2025. In order to properly take stock of it all, we offer InGame’s “EndGame,” an end-of-week compilation of the top storylines, some overlooked items, and all the other news bits from this past week that we found interesting.
On the rail to the Third Circuit
Off we go with the Third Circuit Court of Appeals in the matter of the KalshiEx, LLC v. Flaherty et. al., an action brought by the prediction market platform Kalshi against New Jersey and its gaming regulators.
Kalshi won a preliminary injunction on April 28, allowing it to continue offering its sports event contracts to users in the state while the matter proceeds. The New Jersey defendants filed the notice of appeal on May 8.
Per Goodwin Law’s Andrew Kim, an attorney specializing in appellate litigation and gaming law, this one will take some time to sort out.
Kim told InGame:
In the ordinary course, I expect the appeal to take about a year, maybe a year and change. This strikes me as the kind of case where the panel will want to tread carefully on the merits. This is the first time the issue of CEA preemption as applied to state gaming laws and DCMs is being presented to a federal court of appeals, so the panel will need to really drill down on first principles to try and reach the right result.
There are things that the parties can do to try and speed things up, like file a motion to expedite the appeal. But I don’t really see a basis for doing so here. Note that New Jersey also hasn’t sought a stay pending appeal, which indicates that there’s no real sense of urgency on its part. (And Kalshi certainly doesn’t have an incentive to speed things up–it already has a temporary W.)
I expect both Kalshi and New Jersey to come out with more firepower and more refined legal arguments. I also expect that we’ll see more outside participation/amicus briefs on both sides. The timing of the appeal may make it possible for the CFTC to weigh in, too.
Meanwhile, it is possible New Jersey will seek a stay of the injunction, pending appeal, though “usually you file your stay papers right after you file your notice of appeal,” Kim advised. And the longer New Jersey waits to request a stay, the more difficult it will be to convince Judge Kiel in district court as well as the Third Circuit that it would be harmed if a stay were not granted.
Meanwhile, the show will go on in Judge Kiel’s courtroom. Per Kim:
They’ll trudge on, unless the parties ask for a stay of the proceedings pending the appeal. I could see either New Jersey or both New Jersey and Kalshi asking for a stay of proceedings for the sake of judicial efficiency — we’ll have to see on that front.
The Third Circuit, you may recall, was a main actor in Christie v NCAA, later Murphy v NCAA, the Supreme Court sports betting case that is now an ancestor to the instant case in some way. The Third Circuit had upheld the lower court’s ruling in a 2-1 split decision, ruling against New Jersey, before SCOTUS granted the state’s writ of certiorari in 2016, eventually finding in May 2018 that the federal ban on sports betting outside Nevada was unconstitutional.
For the next legal update around Kalshi, take a couple laps around the block and hit refresh.
Tax rate headed up in Louisiana?
Louisiana lawmakers have been considering increasing the sports betting tax rate, and an amended version that adopts the Illinois sliding-scale model is set for discussion next Monday. The House Ways and Means Committee will hold a hearing at 9 a.m. local time. The bill currently proposes tax rates ranging from 20% for operators who take in “net proceeds” of $30 million or less up to 40% for net proceeds in excess of $200 million.
Illinois lawmakers adopted a similar sliding scale in the spring of 2024, and it went into effect in July 2024. At the time, the Sports Betting Alliance lobbied against the increase, saying operators would have less money to invest in the state, could offer inferior products, and would likely offer fewer promotions.
The group — comprised of BetMGM, DraftKings, Fanatics Sportsbook, and FanDuel — isn’t happy about the Louisiana proposal, either:
Colorado promo deduction bill awaits governor
In the final step before sending HB 1311 to Gov. Jared Polis for signature, Colorado’s House adopted Senate amendments and repassed the bill Wednesday, the final day of the legislative session. The House passed the bill, 52-11. Should Polis sign the bill, sports betting operators will no longer be able to deduct promotional spend as of July 1, 2026. The available deductions will step down beginning Jan. 1, 2026.
The Senate passed the bill, 28-7, late Tuesday. According to a fiscal note, the change could net at least $11 million more per year in tax revenue to the state.
Colorado voters legalized sports betting during the November 2019 election, and when betting went live in May 2020, operators were allowed to deduct 100% of promotional play. Because of this, Sen. Dylan Roberts last week said the effective sports betting tax rate in the state is 5.9%.
Fanatics refunds $500K, one bettor wins big
When Steph Curry went out of Tuesday night’s NBA playoff game in the first half, Fanatics Sportsbook voided and refunded $500,000 in prop bets as part of its “Fair Play” policy. Usually only in play during the first quarter of NBA games, the company extended it to the first half for the playoffs. Essentially, if a player goes out in the first half of a playoff game, all props are voided, and if the player is part of a parlay, that leg is voided but the rest of the parlay stands.
One bettor turned $5,000 into $224,773 on a four-leg parlay that included Curry. With Curry out, the revised odds on the parlay were +9240. It included legs from the Warriors-Timberwolves game and the Inter-Barcelona soccer match. The payout was the largest since Fanatics instituted its Fair Play policy.
Micro-betting site closes mega funding
Susquehanna’s SIG Sports Investments Corp. led a $3 million Series A funding round for micro-betting tech company Kero Gaming, the company announced Tuesday. Kero specializes in “algorithmically curated micro-betting odds feeds.”
“Kero Gaming has demonstrated exceptional growth and innovation in the micro-betting space,” said Joe Grubb, vice president at SIG Sports. “We’re excited to deepen our partnership and support their mission to lead this exciting capability in oddsmaking for one of the highest growth categories within sports entertainment.”
ESPN Bet stream comes to PGA Tour broadcast
For PGA events, ESPN Bet will add a feature that will combine “in-depth data from the Tour’s ShotLink powered by CDW technology and odds generated by ESPN BET,” ESPN announced. The stream, which was available beginning at noon ET Thursday, “will focus on odds and wagers, providing fans with key stats, insights, and live betting analysis throughout the coverage.”
Deploying betting data as a fan-engagement tool has long been a goal of the PGA Tour, which sees its pace of play as a way to mine granular data in betting markets.
“A competition feed with a focus on odds and wagers has been a goal of the PGA Tour since our agreement with ESPN+ first began in 2022,” Scott Warfield, PGA Tour vice president, gaming, said when the partnership via Penn Interactive was announced.
This FanDuel product growing fast
FanDuel’s sports network has doubled its subscriber based in eight weeks, the company announced Monday. Driven by live game coverage, the network has nearly 650,000 paid subscribers, and the company projects it will reach a million direct-to-consumer subscribers by the end of 2025.
FanDuel’s streaming platform averages 250,000 unique daily users and close to a million unique monthly subscribers.
PredictIt case nears a settlement
The legal battle over the CFTC’s effort to close down PredictIt could be drawing to a close, as supporters of the prediction market close in on a settlement with the futures regulator.
According to a joint status update released on Tuesday, PredictIt supporters and the CFTC have had “productive discussions” toward a settlement that would resolve the case, which seeks damages for the CFTC withdrawing the “no action” letter that had allowed PredictIt to operate in the U.S.
— Daniel O’Boyle
ICYMI on InGame
Did the conclave crash Kalshi?
Kalshi says Nevada AG arguments don’t jibe with Constitution
CFTC drops Kalshi appeal about election betting
Want to bet on the ’27 Draft in DC? Then don’t go
Post-PASPA betting handle crosses $500 million
Have a good weekend, folks!
