Political Prediction Markets Surge as US Election Day Nears

Rush-to-the-polls-bet-from-anywhere-Prediction-markets-abound-ahead-of-US-electionsWith the upcoming US presidential election just days away, political prediction markets have gained extraordinary momentum, capturing the attention of both investors and bettors nationwide. This election cycle has seen a rapid rise in platforms like Kalshi, Polymarket, and PredictIt, where political futures contracts allow users to wager on electoral outcomes.

Prediction markets, often structured as derivatives exchanges offering “yes/no” event contracts, have been around for years but faced regulatory hurdles. However, a recent court ruling has redefined their place in the landscape. On October 2, the US Court of Appeals for the District of Columbia ruled in favor of Kalshi, a New York-based platform, allowing it to list contracts related to Senate and House control. The Commodity Futures Trading Commission (CFTC) had previously delisted these contracts in June, arguing that they resembled gaming. Kalshi countered that regulated, legal markets offer a safer alternative to unregulated ones, where the accuracy of real-time data could enhance voter engagement and combat misinformation.

Contract Growth on Kalshi Reaches New Highs

Since the court ruling, Kalshi has seen a surge in activity. As of October 15, the platform had $15 million in political contracts, but by November 3, that figure had climbed to over $250 million, with the presidential race alone accounting for $184 million. Despite this growth, contracts concerning Senate and House control, the initial focus of the CFTC’s concerns, have generated less than $1 million each, indicating smaller interest compared to high-stakes presidential predictions.

Competing Platforms and Market Leader Polymarket

Kalshi may have achieved legal status in the US, but Polymarket, an unregistered crypto-based platform also headquartered in New York, has maintained its market leadership with over $3 billion in contracts for this election cycle. Although Polymarket is technically inaccessible to US users due to CFTC scrutiny, it remains a significant player globally. In contrast to Kalshi, Polymarket has no CFTC registration, and regulation may prove challenging, as detailed in Fortune.

Another prominent player, PredictIt, based in New Zealand and operated by the Victoria University of Wellington, claims to be a research tool rather than a gambling platform. However, the CFTC moved to revoke its “No Action Letter” in March 2023, creating uncertainty about the platform’s future in the US. In a notice to users, PredictIt acknowledged the legal limbo, allowing traders to continue holding and trading contracts pending a final court decision. PredictIt doesn’t display dollar amounts for contracts, but it lists 10.9 million active shares in the presidential election, indicating substantial interest.

Kalshi’s Marketing Shift and Expanding Appeal

Now recognized as the first legal, regulated prediction market in the US, Kalshi’s messaging has evolved to attract broader audiences. In its defense against the CFTC, the company positioned itself as a hedging tool for political risks rather than a betting platform. However, Kalshi’s recent marketing materials use betting language more freely. For instance, its X account bio now describes it as “The first legal way to bet on the election in America.” CEO Tarek Mansour appeared in a Times Square video on Instagram, stating, “It’s actually an app and a website where you can bet on anything. We’re the first platform that legalised betting on the US election.”

Kalshi’s advertisements have spread beyond Times Square to the Las Vegas Strip, a hub for gaming, underscoring the platform’s appeal in traditional betting spaces.

Robinhood’s Entry and Broader Implications

On October 28, stock trading platform Robinhood announced plans to offer election contracts to US users, a move that could disrupt the political prediction market. With its massive user base, Robinhood may draw significant interest. Sports betting investor Chris Grove highlighted Robinhood’s influence, noting that it “towers over US online betting companies by many key metrics.” According to recent figures, Robinhood had 24.2 million funded accounts and 11.8 million monthly active users as of the second quarter of 2024, dwarfing many online betting platforms.

Accuracy and the Future of Prediction Markets

Prediction markets could serve as a valuable tool to combat misinformation, with platforms like Kalshi suggesting that their odds may offer credible insight. Currently, Kalshi’s odds differ from traditional polling data. On Kalshi, Donald Trump has been the favorite for weeks, with a 52%-48% lead over Kamala Harris as of November 3. On Polymarket, Trump holds a 54%-46% advantage. In contrast, traditional polling outlets like FiveThirtyEight show a tighter race, with Harris narrowly leading.

Limited Response from the Gambling Industry

The rapid rise of prediction markets has drawn little response from the established gambling industry. Some former regulators declined to comment, citing a lack of familiarity with prediction markets. Nonetheless, the shifting regulatory landscape has raised questions, especially as Kalshi’s messaging now openly references betting. Las Vegas consultant Brendan Bussmann commented on this shift, noting the tension it creates with federal and state regulations.

As the CFTC continues to examine these markets, it remains unclear how the legal framework will evolve. For now, prediction markets like Kalshi, Polymarket, and PredictIt are set to play a significant role in the upcoming election, marking a new chapter in the intersection of finance, betting, and political engagement.

Sources:

Prediction Markets Surge as US Election Approaches, igamingbusiness.com, November 5, 2024

Betting Markets Narrow as Election Day Nears, usatoday.com, November 4, 2024

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EGBA’s 2024 Report: Regulation, Black Markets, and Sustainability

European-CEOs-share-growing-concerns-over-black-market-resurgenceThe European Gaming and Betting Association (EGBA) has released its 2024 Sustainability Report, shedding light on the current state of the online gambling industry in Europe and emphasizing the urgent need for balanced regulation. The report is a comprehensive overview of the association’s and its members’ efforts to promote sustainable and responsible gambling while addressing the growing issue of black market gambling.

Addressing Black Market Gambling

The EGBA’s report highlights a significant concern: the rise of black market gambling across Europe. CEOs from leading operators, including Flutter, Entain, Evoke and Kindred warn that stringent regulations in countries like the Netherlands, Italy, Spain, and Sweden are inadvertently driving players towards unregulated offshore sites. These sites often lack basic consumer protections and are primarily profit-driven, posing severe risks to players.

Peter Jackson, CEO of Flutter Entertainment, alongside other prominent CEOs, emphasized in the report, “Severe restrictions in these countries prevent an attractive and competitive offer to players that steers them toward safer, locally regulated websites.” The consensus is clear: while enforcement against black market operators is crucial, creating competitive, regulated online markets is the only effective solution to safeguard players.

The Importance of a Balanced Approach

The report advocates for a balanced regulatory framework that not only ensures robust consumer protections but also maintains the competitiveness of the legal market. The EGBA stresses over-regulation can make illegal alternatives more appealing, especially to vulnerable players. In France, for instance, the number of players using black market websites now exceeds those using regulated sites, according to data from the country’s gambling regulator.

“Competitive, regulated online gambling markets are the only effective solution,” the report states. The EGBA calls on national policymakers to design regulations that protect consumers without driving them to unsafe alternatives.

Progress in Responsible Gambling

Despite the challenges posed by black market gambling, the EGBA report highlights significant progress in promoting responsible gambling within the legal market. In 2023, a record 65% of European gamblers used safer gambling tools, up from 60% in 2022. This increase is attributed to a 49% rise in safety messages sent to players, with over a third being personalized based on individual playing behavior.

The report notes that 65% of customers displaying potentially problematic play either improved or stabilized their gambling behavior following safety interventions. This underscores the effectiveness of proactive measures and personalized communication in promoting safer play.

Enhanced Player Protection Measures

The EGBA and its members have made substantial investments in developing advanced safety tools and player intervention mechanisms. These systems leverage health experts, technology, and AI to provide a personalized approach to player safety. The goal is to analyze individual behavior, identify risks, and trigger appropriate interventions to encourage safer gambling practices.

In 2023, 21 million customers had one or more safety tools activated on their accounts, a 14% increase from the previous year. Deposit limits remain the most popular tool, used by 70% of customers who voluntarily activate safety measures.

Looking Ahead: A Sustainable Future

The report also highlights the broader contributions of EGBA members to European society, including significant financial support for problem gambling research, education, and treatment. In 2023, contributions to these areas increased by 25%, reaching €61.2 million.

The EGBA is committed to fostering a culture of sustainable and responsible gambling. The report outlines plans for the fourth edition of European Safer Gambling Week in November 2024, aiming to surpass previous records for engagement and participation.

The EGBA’s 2024 Sustainability Report is a call to action for regulators and policymakers to balance consumer protection with market competitiveness. By fostering a well-regulated and attractive legal market, Europe can effectively combat the risks posed by black market gambling and ensure a safer gambling environment for all players.

Source:

EGBD | European Gaming & Betting Association | Sustainability Report 2024 [pdf]

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Light&Wonder Extends Its Partnership with Everi Digital to Expand to New Markets

Light & Wonder Incorporated and Everi Digital expand their long-term partnership and take it to the next level through a new deal. The partnership with Everi Digital, Everi Holdings Incorporated’s online gaming business, will allow Light & Wonder to expand across new markets in the UK, Europe, and Latin America.

Global expansion

light_and_wonder_signs_expanded_deal_allowing_everi_digital_to_further_global_reach_2Light & Wonder’s fans in the UK will be happy to hear that new games from Everi Digital’s impressive portfolio will be available to them through an advanced Light & Wonder online ecosystem.

When it comes to European expansion, the Italian players will get a chance to try some of Everi Digital’s games in the summer of 2024, while other countries will follow the lead and get access by the end of 2024.

Besides the European market, the companies will expand to South America, where the players will be able to enjoy thrilling Everi Digital’s titles from the first quarter of 2024.

Everi Holdings Incorporated became a leader in the industry when it came to providing both land-based and online casinos with fantastic content and advanced products such as financial technology services, player loyalty solutions, and bingo. The company is famous for following the newest trends, including launching fantastic video instant-win style games and perceived skill games that are about to be launched soon.

The partnership between Everi and Light & Wonder was established four years ago, and since then the companies have strengthened their positions in the North American market, offering a range of captivating content to the players in the continent.

Thanks to the success of the previous deals, they decided to expand it further. It means a lot to Light & Wonder since the deal is the latest phase of its long-term iGaming strategy, which includes establishing new partnerships with successful game developers and strengthening its position as one of the leading content providers in the world.

Light & Wonder’s portfolio currently consists of more than 3.500 games developed in-house and obtained from third-party studios. All of them provide a safe and secure gaming experience since they’re enriched with various responsible gaming tools.

Mutually beneficial partnership

Jordan Brent, the Digital Commercialization Vice-President at Everi, said: “This exciting collaboration with Light & Wonder allows Everi Digital to deliver our award-winning engaging gaming entertainment experiences to new players and markets. We are looking forward to providing our innovative content to a new segment of online players, driving the continued growth trajectory of our collective iGaming business.”

Steve Mayes, the Digital Partnerships Senior Director at Light & Wonder added: “Everi Digital’s content has proven hugely popular with players in North America and we look forward to sharing its games across more of our global network. We are always looking to expand the scope of our online content and stepper and skill games on Everi’s product roadmap will help achieve that goal.”

Source: Campbell, Alan, “Light & Wonder Signs Expanded Deal Allowing Everi Digital to Further Global Reach”. European Gaming. 2/6/2023.

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Light&Wonder Extends Its Partnership with Everi Digital to Expand to New Markets

Light & Wonder Incorporated and Everi Digital expand their long-term partnership and take it to the next level through a new deal. The partnership with Everi Digital, Everi Holdings Incorporated’s online gaming business, will allow Light & Wonder to expand across new markets in the UK, Europe, and Latin America.

Global expansion

light_and_wonder_signs_expanded_deal_allowing_everi_digital_to_further_global_reach_2Light & Wonder’s fans in the UK will be happy to hear that new games from Everi Digital’s impressive portfolio will be available to them through an advanced Light & Wonder online ecosystem.

When it comes to European expansion, the Italian players will get a chance to try some of Everi Digital’s games in the summer of 2024, while other countries will follow the lead and get access by the end of 2024.

Besides the European market, the companies will expand to South America, where the players will be able to enjoy thrilling Everi Digital’s titles from the first quarter of 2024.

Everi Holdings Incorporated became a leader in the industry when it came to providing both land-based and online casinos with fantastic content and advanced products such as financial technology services, player loyalty solutions, and bingo. The company is famous for following the newest trends, including launching fantastic video instant-win style games and perceived skill games that are about to be launched soon.

The partnership between Everi and Light & Wonder was established four years ago, and since then the companies have strengthened their positions in the North American market, offering a range of captivating content to the players in the continent.

Thanks to the success of the previous deals, they decided to expand it further. It means a lot to Light & Wonder since the deal is the latest phase of its long-term iGaming strategy, which includes establishing new partnerships with successful game developers and strengthening its position as one of the leading content providers in the world.

Light & Wonder’s portfolio currently consists of more than 3.500 games developed in-house and obtained from third-party studios. All of them provide a safe and secure gaming experience since they’re enriched with various responsible gaming tools.

Mutually beneficial partnership

Jordan Brent, the Digital Commercialization Vice-President at Everi, said: “This exciting collaboration with Light & Wonder allows Everi Digital to deliver our award-winning engaging gaming entertainment experiences to new players and markets. We are looking forward to providing our innovative content to a new segment of online players, driving the continued growth trajectory of our collective iGaming business.”

Steve Mayes, the Digital Partnerships Senior Director at Light & Wonder added: “Everi Digital’s content has proven hugely popular with players in North America and we look forward to sharing its games across more of our global network. We are always looking to expand the scope of our online content and stepper and skill games on Everi’s product roadmap will help achieve that goal.”

Source: Campbell, Alan, “Light & Wonder Signs Expanded Deal Allowing Everi Digital to Further Global Reach”. European Gaming. 2/6/2023.

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Strive Gaming Remain Fully Focused on North American Markets

home_field_advantage_strive_creates_a_pam_for_north_americaStrive Gaming, a software supplier that has created a full service omni-channel iGaming platform designed specifically for the North American markets, has announced it will keep focusing on the United States.

The company was founded just three years ago by Damian Xuereb, the current President, together with Max Meltzer, the current Chief Executive Officer. Xuereb says that the business had the advantage of understanding nuances of markets in each of the American states it operates in.

“We had the opportunity to do our research and ensure we built a product that meets not just the current state, but the future state or requirements, as and when we roll out into more and more states,” Damian Xuereb explained.

Another advantage for the company is that it refused to step into other markets away from the United States, keeping its focus solely on North America. “We won’t get distracted by other regulations,” Xuereb underlined, pointing out that the Brazilian, Dutch or German markets are not of interest for his company. “That means our business and our product will continually evolve around the North American player experience,” he added.

Eight Big Clients Secured

During its three years of activity, Strive Gaming secured partnerships with eight important iGaming brands. The first two were Desert Diamond and Golden Nugget Online Gaming in Arizona. Then the company signed agreements with Betsafe, PointsBet in Canada and Four Winds, owned by the Pokagon Band of Potawatomi Indians. The supplier has already secured additional clients which are yet to be announced.

About the company’s partners, Damian Xuereb said that all of them managed to “gain meaningful market share.” The Strive Gaming President gave the example of Desert Diamond in Arizona, which is owned by a local tribal operator, and revealed that the brand is successfully competing with “big hitters” and also triumphed against nationwide companies. “With the right technology behind a brand, local operators can compete,” Damian Xuereb concluded.

The Strive Gaming founder also predicted that there will be growing opportunities in North America because while online sports betting is currently present in 36 American states, iCasino is available in just seven states and the market is bound to expand. Indiana is one of the states where gambling legalization is discussed, while Joseph Addabbo, a state senator from New York, has introduced a new version of a bill which would legalize online casino gaming and internet lottery.

Source: “Home field advantage: Strive creates a PAM for North America“. iGaming Business. January 24, 2024.

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