Gambling Industry Stories to Watch This Week: Key Hearings Set on Prediction Markets, Sweeps

Every Monday, Gambling Insider will publish an article tracking the regulatory, legislative, and legal developments to watch in the week ahead. Rather than covering events after the fact, Gambling Industry Stories to Watch is designed to flag upcoming decision points — including hearings, filing deadlines, market exits, and political signals — that could influence operator strategy, regulatory posture, and broader market direction.

Updated on 5 January 2026

The new year’s first watch list spans statehouses and courtrooms, with particular focus on prediction markets, sweepstakes models, iGaming politics, and emerging compliance issues.

Prediction Markets and Federal–State Tensions

Undoubtedly, prediction markets were the gambling industry’s biggest story of 2025 and will likely continue to be in 2026. This week, there are two court dates in the legal battles between prediction market operators and state gaming regulators.

Coinbase vs. Michigan Status Conference, January 6

A status conference in the Coinbase v. Michigan prediction markets lawsuit is scheduled for Tuesday, January 6. U.S. District Judge Shalina D. Kumar is overseeing the case.

The conference will likely focus on case management and potential dates for oral argument on Coinbase’s motion for a preliminary injunction against the state enforcing its gaming laws on prediction markets, following the entry of a briefing schedule in the case.

According to the schedule, Michigan’s response to the preliminary injunction motion is due on January 23. Meanwhile, Coinbase’s reply is due by February 13. The court has also directed the parties to propose potential dates for oral argument.

Michigan has agreed to refrain from taking enforcement action against Coinbase while the preliminary injunction motion is pending.

What to watch: Whether the court signals an expedited timeline for oral argument and resolution of the preliminary injunction request.

Connecticut Deadline in Kalshi Case, January 9

The Kalshi v. Connecticut prediction markets lawsuit also reaches a procedural milestone this week. The state is required to file its response brief opposing Kalshi’s motion for a preliminary injunction by January 9.

The court has entered a briefing schedule on the motion. Kalshi’s reply brief is due January 30, and oral argument on the preliminary injunction request is scheduled for February 12.

The upcoming filings and hearing will frame the dispute over jurisdiction, regulatory authority, and the state’s asserted interests as the court considers whether to grant an injunctive relief.

What to watch: How Connecticut frames the public-interest and harm analysis in opposing preliminary relief. Also, whether the court’s scheduling signals an intent to resolve the injunction request on an expedited timeline.

A Bill Could Target Insider Trading in Prediction Markets

Reports have recently surfaced that Rep. Ritchie Torres (D-N.Y.) is expected to introduce the Public Integrity in Financial Prediction Markets Act of 2026. The measure aims to address concerns about insider trading tied to prediction markets.

According to a source, the bill would prohibit federal elected officials, political appointees, and Executive Branch employees from buying, selling, or exchanging prediction market contracts tied to government policy, government action, or political outcomes when they possess, or could reasonably obtain, material nonpublic information through their official duties.

The proposal follows growing scrutiny of whether prediction markets adequately restrict trading based on nonpublic information. Recent market activity has intensified debate around the issue, including instances in which significant, well-timed positions on geopolitical outcomes generated substantial profits shortly before public developments occurred.

What to watch: Whether Torres introduces the bill.

Sweepstakes and Gray-Market Pressure

While prediction markets experienced significant growth in 2025, sweepstakes casinos (the big story of 2024) saw their market size shrink fast. This year is likely to see more states targeting the dual-currency, unregulated sector.

Indiana Sweepstakes Bill Receives First Hearing

As the industry enters 2026, lawmakers in Florida, Indiana, and Maine have pre-filed ban bills.

The first to receive a hearing is Indiana’s HB 1052. On January 6, Indiana’s House Public Policy Committee will hear testimony, marking an early but notable step in the state’s legislative process.

The bill is a broad administrative bill, with the ban on sweepstakes casinos being a minor provision within it. Still, first hearings usually establish the tone of the bill’s trajectory.

What to watch: Whether the committee hears testimonies on sweepstakes casinos in particular, and whether it votes on the bill. Also, if the committee will schedule new dates, and if so, how far in the future?

Signs of Increased Sweepstakes Pressure in Illinois

Gaming content provider Evolution is reportedly removing its content from Illinois. A few sweepstakes casinos, such as popular platforms Stake.us and Modo, have discontinued offering Evolution’s games (including live dealer) in the state.

Gambling Insider has confirmed that another provider, Fat Panda, has also ceased offering its games at Stake in Illinois. Notably, Fat Panda, along with Evolution and other providers, removed their content from Stake in California shortly after the Los Angeles City Attorney filed a lawsuit.

A further sign that something might be brewing in Illinois is that sweepstakes casino ToraTora informed users that it is exiting the state due to state regulations.

At this stage, there have been no public enforcement actions. Still, a similar phenomenon occurred in Tennessee at the end of 2025, with dozens of platforms exiting. On December 29, the state’s Attorney General announced enforcement action.

What to watch: Whether additional operators or content providers follow suit. Additionally, whether Illinois Attorney General Kwame Raoul or the Illinois Gaming Board announces enforcement actions.

iGaming Developments

The last few years have been quiet for online casino expansion. The last state to go live with iGaming was Rhode Island in March 2024. Still, 2025 was not short of new bills, with 2026 likely to continue that trend.

Is Maine’s Governor Going to Veto iGaming Bill?

In June 2025, the Maine Legislature passed an iGaming bill that would allow four skins under the control of the state’s four Native American tribes. However, Gov. Janet Mills declined to sign or veto it, instead pushing it back to 2026.

Once lawmakers reconvene on January 7, the governor has three days to sign or veto it. Industry observers anticipate the latter, as Mills has a history of vetoing gambling bills.

Also, in December, the Maine Gambling Control Board sent a letter to the governor, urging her to veto the bill. The regulator cited concerns that the state’s two commercial casinos are left out, which would result in lost jobs and revenue.

What to watch: Whether Mills signs, vetoes, or takes no action on the iGaming bill. If she fails to act again, the bill will automatically become law, making Maine the eighth state to legalize online casinos.

Will Sen. Addabbo Jr. Introduce a New iGaming Bill in NY

Another state to watch is New York. State senator Joseph Addabbo Jr. has championed iGaming efforts in each of the past few years, albeit with little success.

However, major developments at the end of 2025 could mean online casinos have slightly better chances in 2026. Last year, Addabbo introduced a bill banning sweepstakes casinos, which the state passed, and Gov. Hochul signed into law last month.

Also, New York finalized the long process of selecting downstate retail casinos, awarding licenses to Bally’s Bronx, Resorts World New York City, and Metropolitan Park (backed by Hard Rock International and Mets owner Steve Cohen).

In December, Addabbo said that the state is “better positioned” to have serious discussions about iGaming in 2026. Given his track record from past years, he is likely to introduce a new bill this month, possibly as early as this week.

What to Watch: Whether Addabbo Jr. introduces a new bill.

Gambling Loss Deduction Fight Could Face Opposition

A significant change in gambling tax reporting came into effect on January 1.

The new law limits gambling loss deductions to 90%, instead of the previous 100% (up to the winnings). That means a bettor who wins and loses the same amount could still face federal tax on up to 10% of their reported income.

The change resulted in significant backlash from the industry and some lawmakers, who introduced multiple bills in response. Rep. Dina Titus (D-NV) has become the most vocal supporter of restoring the full deduction.

Recent reporting has suggested that the Senate effort, known as the FULL HOUSE Act and introduced by Sen. Catherine Cortez Masto (D-NV), could face opposition. The bill currently sits in the Senate Finance Committee. One committee member, Sen. James Lankford (R-OK), recently told Punchbowl News that he’s opposed to restoring the 100% loss deduction.

What to watch: Whether the Senate Finance Committee or the House Ways and Means Committee, where Titus’ bill is currently sitting, holds a meeting. Also, whether other lawmakers come out in opposition to restoring the 100% loss deduction.

Looking Ahead

While the year has just begun, this week features several potential inflection points across the gambling industry.

Future editions of Gambling Industry Stories to Watch will continue to track these pressure points. They will highlight what matters before outcomes are known, and why timing itself is often the story.