The Gambling Wire: FTC Eyes Sportsbooks as Kalshi Tribal Deal Faces Dispute

Federal regulators reportedly examine sportsbook advertising practices. Meanwhile, conflicting reports have emerged over Kalshi’s tribal partnership.

DraftKings and FanDuel continue to draw scrutiny over their marketing practices, as the Federal Trade Commission (FTC) is reportedly investigating online sports betting. Meanwhile, competing leadership factions within the Alabama-Quassarte Tribal Town have issued conflicting statements about a partnership with Kalshi.

Elsewhere, Pennsylvania begins enforcing its skill-game restrictions, and BetMGM reports sharply higher quarterly earnings. Also in the news, an NCAA point-shaving organizer receives a six-year prison sentence, while the NBA and WNBA announce a responsible gaming campaign addressing both sports betting and prediction markets.

The Big Story: FTC Reportedly Begins Sportsbooks Review

The FTC is probing the online sportsbooks industry, reportedly in response to allegations of deceptive or misleading advertising, The Washington Sun reported.

Citing three people familiar with the matter, the publication said both political appointees and career staff were involved in the preliminary evaluation. The Sun reported that prediction markets were not expected to be included in the review, which remains in its early stages.

DraftKings told the Sun that it had not received a civil investigative demand from the FTC, while FanDuel and the agency declined to comment. Sports Betting Alliance President Joe Maloney pointed to the Responsible Online Gaming Association’s marketing standards in defending the industry’s consumer protection commitments.

The reported probe arrives as both DraftKings and FanDuel face growing pressure over their marketing practices.

A New York Times investigation last month alleged that DraftKings used AI to identify customers likely to lose more money through promotions. The report prompted investigations by regulators in Massachusetts, Michigan, and Maine, as well as a class action lawsuit.

FanDuel, meanwhile, has faced scrutiny from federal lawmakers for using personalized messages to VIP customers. During the summer, a personalized video featuring Bryce Harper was sent to a customer with a gambling addiction who had lost $1.5 million on the platform, drawing national attention.

The Daily Wire

Kalshi Tribal Partnership Faces Questions Amid Leadership Dispute

A week after Kalshi partnered with four Native American tribes to launch prediction market apps, conflicting statements have emerged over one of those agreements.

CNN updated its reporting to describe the app as having been launched by a faction of the Alabama-Quassarte Tribal Town. Another faction subsequently opposed the agreement, arguing that prediction markets constitute illegal gambling and threaten tribal gaming revenue. CNN reporter Marshall Cohen described the development as part of a longstanding leadership dispute.

A statement shared by Indian Gaming Association conference chair Victor Rocha denied that the Tribal administration, governing committee or its representatives had entered into an agreement with Kalshi. It identified Samuel Marshall Jr. as chief and a media contact.

The denial contrasts with statements provided to Gambling Insider by a spokesperson for the Oklahoma tribe. The spokesperson outlined a transaction-based revenue-sharing arrangement with Kalshi and said the tribe intended to launch PokkeTrades in November.

“Through our agreement with Kalshi, we anticipate earning a share of transaction revenue generated through the platform,” the spokesperson told Gambling Insider.

The spokesperson also acknowledged the outstanding legal questions surrounding sports event contracts.

“We recognize that federal regulation does not, by itself, resolve every question about the application of state and tribal gaming laws,” the spokesperson said.

NCAA Point-Shaving Organizer Sentenced to Six Years

Jalen Smith, a key figure in an NCAA basketball point-shaving scheme, was sentenced to six years in prison. Smith also received three years of supervised release, approximately $1.1 million in restitution and $75,000 in forfeiture.

Smith pleaded guilty in March to bribery in sporting contests, conspiracy to commit wire fraud, wire fraud and possession of a firearm by a felon.

According to prosecutors, between 2022 and 2025, Smith and co-conspirators recruited, managed and paid players to underperform. They targeted players who earned relatively little through name, image, likeness (NIL) compensation and players on underdog teams. Bribes typically ranged from $10,000 to $30,000 per game.

The broader NCAA scheme involved more than 39 players across more than 17 Division I teams and efforts to fix more than 29 games. Prosecutors said the scheme involved more than $3 million in fraudulent wagers and caused over $1.1 million in losses to sportsbooks.

Pennsylvania Skill Games Face Enforcement as Deadline Passes

Skill games in Pennsylvania are officially subject to enforcement action after lawmakers failed to establish a regulatory framework before the Oct. 13 deadline.

In June, the state Supreme Court ruled that the devices qualify as slot machines under Pennsylvania law. The court delayed enforcement for 120 days, giving lawmakers time to establish a regulatory framework. Restaurants, bars, convenience stores, American Legion posts, and veterans’ organizations must now remove the machines or face sanctions.

State Police guidance says establishments possessing, operating or maintaining the machines outside Pennsylvania Gaming Control Board-licensed locations are subject to criminal prosecution and immediate seizure beginning Oct. 14.

Potential enforcement actions include confiscation of machines, related equipment and proceeds, as well as criminal charges. Businesses with liquor licenses could also face administrative citations, fines or license suspensions. Simply turning the machines off is not enough.

BetMGM Q3 Adjusted EBITDA Doubles as Revenue Rises 7%

BetMGM reported third-quarter adjusted EBITDA of $86 million, up 112% year over year, while net revenue increased 7% to $710 million.

The company reported iGaming revenue of $483 million, up 6% year over year. Meanwhile, online sports betting revenue increased 7% to $216 million. Sportsbook handle grew 3% to $3.24 billion.

BetMGM reiterated its full-year guidance but said it expects results to fall toward the lower end of the range. The company also reported a successful launch in Alberta, with per-player metrics trending above those recorded during its Ontario launch.

CEO Adam Greenblatt said during Tuesday’s investor call that customer acquisition costs had fallen. He said the company had scaled back marketing in sportsbook-only states and was targeting high-spending customers, a strategy he said was working.

NBA and WNBA Campaign Includes Prediction Market Risks

The NBA and WNBA will launch a responsible gaming campaign in partnership with the National Council on Problem Gambling (NCPG) during the upcoming season. It will cover both sports betting and prediction markets.

The campaign will include advertising across social media and television through league and partner channels. The initiative aims to “educate fans, particularly young adults, about the risks associated with sports betting and prediction markets.”

The campaign will also encourage fans to set spending limits, recognize potentially harmful gambling behavior and avoid spending money they cannot afford to lose.

Treasury Sanctions Cartel-Linked Horse Racing Network

The U.S. Treasury sanctioned four individuals and 11 entities connected to Cartel del Noreste, including a Mexican racetrack that the department says generates revenue for the criminal organization. The Office of Foreign Assets Control (OFAC) action targets businesses spanning quarter horse racing, construction, trucking and the oil and gas sector.

Among the designated businesses is Club La Molienda, a racetrack near Nuevo Laredo, Mexico. Treasury said cartel leaders and associates use the venue to race horses, including many purchased in the United States.

The latest action follows Treasury sanctions in April against Casino Centenario and Diamante Casino over their alleged cartel connections. Treasury said Casino Centenario was used to launder illicit proceeds through gambling operations and store fentanyl and cocaine.

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