State of Play

Lawmakers and courts will make important decisions in the next month or two on online casinos, prediction markets, and sweepstakes casinos.

Statehouses and courts across the US are gearing up for critical hearings on prediction markets, sweepstakes, and online casinos, all of which could shape the online gambling landscape this year.

Bettors and operators alike should watch for legal rulings and legislative moves that may impact market access and regulatory compliance nationwide.

Prediction Markets and State-Level Clashes

The week opens with important court and legislative sessions focused on prediction markets and sweepstakes casinos.

Two key court events highlight ongoing clashes between prediction market (PM) operators Coinbase and Kalshi and their respective state regulators in Michigan and Connecticut. Both states face legal decisions on preliminary injunctions that could redefine regulatory authority over PMs, with oral arguments expected by mid-February.

Federal Efforts on Insider Trading in Prediction Markets

At the federal level, a bill targeting insider trading in PMs, spearheaded by Rep. Ritchie Torres (D-NY), may soon be introduced to curb federal employee trading on sensitive government policy outcomes.

Scrutiny on Sweepstakes Casinos

Sweepstakes casinos, which saw a decline in 2025, are under increasing scrutiny in several states. Indiana will hold a first hearing on a sweepstakes ban bill that could influence the unregulated dual-currency sector. Illinois shows signs of growing pressure as major providers withdraw content amid regulatory concerns, though no enforcement actions have been announced yet.

Maine Governor Mulls Online Casino Bill

Online casinos look set for legislative activity with Maine’s online casino bill awaiting a decision from Gov. Janet Mills.

New York’s Sen. Joseph Addabbo Jr. is poised to introduce new online casino legislation following recent retail casino licenses awarded to downstate New York casino projects.

Tax Reporting Changes and Industry Response

Meanwhile, tax reporting changes restricting gambling loss deductions have sparked opposition efforts in Congress, with ongoing debates on whether to restore full deductions.

Outlook for US Gambling Policy in 2026

Overall, the week marks a pivotal point in gambling policy, with legal outcomes and legislative decisions poised to impact market dynamics and player access in the US gambling sector throughout 2026.

Based on reporting by Chavdar Vasilev for Gambling Insider.