Duffy Riles Kalshi, Novig Starts Fast, Horse Racing Hit with Another Scandal in This Week’s Bingos & Busts
A spat at a CFTC meeting, an insider trading controversy bubbling up around horse racing, and a sports betting editor setting a fine example make headlines.
When we’re talking next month about football driving billions of dollars through prediction markets during the exchange’s first real season in business, Novig will be among the stories to watch. With basically nothing except baseball on the betting docket, the platform came storming out of the gates with impressive trading volume in its first week as a PM.
Our use of a horse racing analogy in the sentence above is purely coincidental with a different headline grabber this week: another scandal blighting the sport, this one involving a well-respected figure that may have wider-ranging implications.
Also in the news, a financial industry stalwart rankles the prediction market establishment, and payment processors are ensnared in a lawsuit against sweepstakes casinos filed by Florida’s top cop.
Here’s a look back at some of the news shaping the gambling industry this week:
Bingo: Duffy Brings the Heat to CFTC Meeting
CME Group CEO Terry Duffy ruffled feathers at the inaugural meeting of the Commodity Futures Trading Commission’s Innovation Advisory Committee on Thursday, calling out prediction markets’ susceptibility to insider trading and market manipulation. The CFTC, Duffy pointed out, has not rejected any of the 2,500-plus self-certified contracts filed over the last two years, including the Trump mention markets the President’s teleprompter operator cashed on and certain player prop-style sports contracts. Said Duffy: “This is not good for our industry. It’s horrible for our industry. We are not a bunch of carnival barkers at a circus.” CFTC Char Mike Selig and Kalshi co-founder Luana Lopes Lara pushed back, and the meeting devolved into a trading of barbs between Duffy and Lara, but let’s credit Duffy for trying to keep prediction markets, ummmmm, honest.
Bust: Horse Racing Beset by Second Insider Scheme in as Many Weeks
Horse racing keeps showing up in our weekly rundown – but for the wrong reasons. While the beginning of August brought news that the Triple Crown is on the brink of irrelevance, insider trading allegations within the sport have crept up for the second straight week. After suspicious bets were cashed on suspiciously won races at Saratoga and Monmouth earlier this month, the Horseracing Integrity and Safety Authority has brought charges against Marshall Gramm, a respected horse player, owner and professor, who used information accessed from a protected database to help make decisions on which horses to claim. Gramm’s admission/apology fell short, and he faces a potential lifetime ban. “Our evidence showed that Mr. Gramm used essentially an automated and invisible browser to download records at scale, while employing methods to avoid detection,” said HISA CEO Lisa Lazarus. As Steve Bittenbender writes, the scandal could deepen.
Bingo: Novig Off to Hot Start
A week after earning a bingo for an initiative that aspires to set a responsible gaming standard for prediction markets, Novig reported that over $125 million in trading volume was transacted in the first week of its exchange’s launch. That’s multiple times higher than Kalshi, Polymarket US, Underdog or DraftKings’ DKeX did in their opening weeks and puts Novig at No. 4 on the U.S. prediction market rankings. Seems transitioning a user base from a sweepstakes platform to a new prediction market is going well. While parlays are accounting for about a third of the volume and baseball is dominating the action, Novig’s numbers figure to increase exponentially come football season.
Bust: Florida AG Sues Big Sweeps Brands and Payment Processors
Prediction markets are getting a lot of the headlines, but sweepstakes casinos aren’t exactly flying under the radar. While Florida has yet to pass a law banning the dual-currency platforms, the state’s Attorney General James Uthmeier is taking matters in his own hands, suing Stake and VGW, two of the biggest brands in the sweeps industry. Utheimer’s suit also targets payment processors that work with the operators, a move intended to scare the companies away from the gray market and stifle the flow of money.
Bingo: SI’s Iain MacMillan is Having Fun, Showing Profit, Teaching Valuable Lessons
He’s not getting rich, he’s not going broke, in fact, he’s a little ahead. Either way, we like SI editor Iain MacMillan’s measured approach to betting on sports. Wagering $100 every day for a year, MacMillan is showing a slight profit after Day 229. More importantly, he’s imparting vital lessons on his audience, and ones we’ll always believe in. Line shop, look for value, set limits, gamble responsibly. Break even, be happy; win a little, even better; lose affordable amounts, no big deal, you’re still having fun. While everyone’s guardrails and risk tolerance are different, MacMillan is staying within his. You don’t necessarily have to be “sharp” to be smart. Good luck the rest of the way, Iain!
Bust: Polls Fail to Tell Full Story, or Even the Truth
The results of a survey released last week finding that 52% of Gen Z investors have directed investing funds to sports betting didn’t pass the smell test, and after dissecting the data and methodology, InGame’s Jeff Edelstein goes so far as to call the study a “load of trash”. A Gallup poll released this week tells basically the opposite story, that fewer Americans are gambling now than they were 10 years ago, but there are problems with that survey’s methodology, too. While we’re fed a constant stream of polls purporting to gauge the country’s attitudes and behaviors regarding our industry, our salt shakers should be firmly in hand as we digest the results.
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