The US federal government is likely to intervene against quasi-gambling products in 2025, according to analysts at Regulus Partners.

The analysts argued the rise of grey gambling products like DFS 2.0, sweepstakes casinos and most recently sports CFDs reached a tipping in the beginning of the year, leading to a possible Trump Administration intervention.

While gaming has traditionally been regulated by states and tribal entities, Regulus said a newfound inability to clearly define gambling is putting “considerable strain” on this model.

Regulus said: “We believe that 2025 has started with a critical mass of US legal workarounds for quasi online gambling products reaching a tipping point that is overwhelming the state-by-state solution.

“The generally pro-gambling nature of the incoming administration actually increases the likelihood of action, in our view, because gambling stakeholders will be listened to. Initially, Federal government might just seek to clarify what is not allowed, but governments rarely stop there – even right-wing governments that want to be small.

“If the Feds do start to intervene, and we believe that they have been left with little choice, then 2025 could be a defining year for US gambling.”

The analysts added the US has long been used to handling blurred legislative lines in the courtroom, demonstrated by numerous sweepstakes casino legal cases.

Regulus says Congress should intervene on sweeps

However, Regulus argued some products do seem to be over the line as quasi-casino offerings and highlighted the sweepstakes carve-out is partly federal through the Deceptive Mail Prevention and Enforcement Act.

The analysts added: “This particular Gordian Knot is probably best resolved by a dashing blond hero wielding a legislative sword rather than by adding further strings of complexity; something that will likely appeal to the White House from 20 January.”

“The legislative enforcement problem, if it is seen as such by a critical mass of stakeholders, will simply go away without impacting states’ rights at all – indeed a number of state actors would likely applaud the clarity. The problem for the incumbents is, the current market would simply go away also.”

Regulus said DFS 2.0 and sports betting using CFDs, which were launched just before Christmas by Crypto.com, pose similar definitional problems.

CFDs are in theory for investment purposes, the analysts argued, and investing is federal business.

They highlighted the fact that CFDs fall under different regulation to betting, as opposed to there being an absence of regulation.

This, the analysts argued, makes it much harder for states to stop licensed CFD operators from offering sports products.  

Regulus said: “We struggle with the idea that a Trump White House and a Republican Congress will let investing to become sports betting by another name just because the first operator has ‘crypto’ in the title – and Trump likes crypto.

“If CFDs can offer sports, then the states have just lost their right to regulate and tax sports betting.”

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