- We went to a gambling conference to check the vibes in the industry.
- Prediction markets and sweepstakes are creating competition, and the space is facing regulatory pushback.
- Industry insiders discussed challenger brands, AI, crypto, tariffs, and more.
A battle is brewing between the titans of the US gambling industry and challenger brands pioneering areas like sweepstakes, predictions markets, and new daily fantasy models.
We recently attended Next.io’s Next Summit in New York to check the vibes from its roughly 1,000 gambling industry investors, entrepreneurs, and executives. This year, tensions between the big betting companies and disrupters surfaced on panels and in talks among insiders.
Emerging formats like prediction markets are gaining traction in the US and are regulated differently from sports betting and online gambling. In some cases, that means they can reach a wider audience, creating a threat — or opportunity — for gambling companies.
Prediction markets from Crypto.com, Kalshi, and Polymarket, for example, are legal in all 50 US states. These companies recently started offering contracts on sports. People buy “yes” or “no” on outcomes, like whether Duke will win the March Madness men’s tournament. There are no money lines, point spreads, or parlays. Still, sports predictions function a lot like online sports betting, which is only legal in 33 states.
The Commodity Futures Trading Commission is reviewing sports prediction markets and could still shut them down, but a nationwide version of sports betting could change the industry’s dynamics. Prediction markets are regulated at the federal level, while gambling is a state issue.
“The CFTC-mediated sports prediction markets could really upend that dynamic,” investor Chris Grove, cofounder and general partner of Acies Investments, said at the event.
Grove thinks gambling operators could consider pushing into predictions. He also said that by the end of the year, if apps like Kalshi are still in sports, they could evolve to offer full-game parlays, making them even more like sports betting.
“I don’t think prediction markets are going to change everything, but I think they will threaten to change a lot of things, and being ignorant to those threats is probably the biggest risk for everyone in this room,” Grove said.
Sports predictions and other emerging categories, such as sweepstakes that are free to enter and pick ’em fantasy sports that riff on gambling’s parlay model with picks on a selection of player stats, were big themes at the conference — as were AI, crypto gaming, M&A, and the impact of the Trump administration and tariffs.
Here were the topics insiders were buzzing about at the conference:
AI is disrupting gambling
AI was one of the biggest themes, including how potential bettors and gambling companies use it.
AI-powered searches can take traffic from Google and other search engines where gambling companies acquire users. Grove said during his presentation that AI is “disrupting” that model.
“The operators who are fastest to learn how to optimize the AI-driven search landscape are likely to realize substantial consumer and margin gains,” Grove said. “I think we could see a reshaping of market share in the process.”
AI could also be used in online games. Justin Park, the CEO of Canada-based online slots company Betty, said AI could be used to develop new slot experiences since they use random number generators.
Microsoft had a big presence at the conference with a panel on how to use generative AI in games through Microsoft Muse.
Warren Cho, Microsoft’s worldwide gaming vertical leader, said his previous manager had an “allergic reaction” when he said he wanted to work with gambling companies. But the US tech giant has since expanded its work with brands in Europe, where sports betting is “part of the culture,” and is looking to do more in regulated markets.
Sweepstakes ruffle feathers
There’s a particularly fierce lobbying war surrounding sweepstakes. They resemble online casino games but are free to play and typically have a freemium model where users buy and bet digital coins.
Grove and others said online gambling operators had been trying to “tamp down” competition from sweepstakes.
The category has faced regulatory pushback similar to what pick- ’em fantasy encountered a few years ago, with states like New York looking to ban it.
Erik Nyman, president of Americas for supplier EveryMatrix, said in one session that vendors need to “pick a side” between gambling and sweepstakes in markets where the latter is unregulated.
But these sweepstakes companies are also amassing war chests they could use to fight back as they make more money.
“This is the United States, legislation gets put forth by people who are well organized and who have money and lobbyists and interest, and legislation is successfully opposed in the exact same way,” said Bill Gantz, a partner at Duane Morris LLP who has been involved in social casino litigation.
Categories like sweepstakes have become a sore spot as the expansion of online casino legislation has all but ground to a halt, and some lawmakers have sought to rein in sports betting. Still, some insiders think sweepstakes could make lawmakers more comfortable with gambling in the long run since these games are free to enter.
“Social sweepstakes is an answer to the online casino legislation logjam,” Grove said.
Crypto is back
Crypto gaming was hot.
And then it wasn’t.
It seems to be back again this year.
Investors on an M&A panel predicted a crypto exchange or retail trading app could buy a betting company. Roger Ehrenberg at Eberg Capital said crypto was a “complete unlock” for the gambling industry.
The vibes are not good between the US and Canada
Uncertainty around tariffs and inflation has dragged down the stock market this month.
But perhaps the biggest hit to the US gambling industry so far has come from our neighbors to the North.
Relationships between some US and Canadian gambling companies appear to be souring in the fallout of Trump’s tariff policy and 51st-state remarks. Leaders in key Canadian markets with legal gambling, including Ontario and British Columbia, have called for retaliatory measures on US businesses.
Two gambling insiders told BI that in response, some Canadian companies are canceling contracts with US companies. Canadian customers are also boycotting US betting brands and looking to homegrown alternatives.
“We’re not going to take it lying down,” said Paul Burns, President and CEO of the Canadian Gaming Association, of President Donald Trump’s recent Canada comments.
Despite the tensions and overall economic uncertainty, the broader outlook among gambling companies was relatively rosy.
Investors at Next Summit predicted an uptick in M&A in the next 12 to 24 months.
Insiders on the ground talked up nascent areas that could benefit from the Trump administration’s policies, such as crypto gambling and prediction markets. And the trade group, the American Gaming Association, pointed to Trump’s experience in the gambling business. President and CEO Bill Miller called Trump a “casino guy” who has always treated the industry fairly.
Entertainment and social could grow the industry
Gambling is positioning itself as entertainment, and companies are borrowing tactics from Hollywood and social media. Insiders drew several comparisons to Netflix, including DraftKings’ chief product officer Corey Gottlieb who said onstage that his team modeled its casino app after the streamer’s user experience.
Betr, a sports media and betting company cofounded by influencer Jake Paul and entrepreneur Joey Levy, has podcasts with high-profile influencers like “Hawk Tuah Girl” Haliey Welch. The company said it’d love to do a deal with YouTube’s biggest star, MrBeast.
Edward King, cofounding partner and co-chief investment officer of Acies Investments, added there’s a big opportunity for entrepreneurs.
“This should be viewed as an entertainment industry, and what is it you could do to bring that person in?” he said. “And if you do that then the industry is going to increase in size by about fivefold.”
