Feds to Tackle ‘Quasi-Gambling’ in 2025

Picture the US government stepping in to ban or reshape quasi-gambling products before the year’s end.

According to Regulus Partners, everything from DFS 2.0 to sweepstakes casinos has triggered a looming federal showdown.

Think of states losing oversight power overnight, while potential winners and losers scramble to adapt.

Read on to see why 2025 may be the year that DFS 2.0, sports CFDs, and other grey products face a federal reckoning.

Analysts Warn of Federal Clampdown: Quasi-Gambling Products Reach Tipping Point in 2025

3 Key Points

1. Regulus Partners expects Trump Administration to tackle DFS 2.0, sweepstakes, and sports CFDs.
2. State-by-state regulation struggles, prompting federal intervention to clarify the line between gambling and investing.
3. CFDs could uproot state authority over sports betting, risking states’ ability to tax and regulate.

Regulus Partners forecasts that the US federal government will likely intervene in 2025 to rein in “quasi-gambling” products. The analysts warn that these emerging verticals—DFS 2.0, sweepstakes casinos, and sports CFDs—have grown too big and too complex for states to manage alone.

At the heart of this issue lies a tipping point. Regulus sees an onslaught of new “legal workarounds” overwhelming the traditional state-by-state system. In the past, states and tribal entities oversaw gaming. But now, the inability to define gambling precisely is fracturing that approach. For instance, daily fantasy 2.0 expansions, novel sweepstakes formats, and the newly launched sports contract for difference (CFD) offerings complicate matters.

Regulus references a likely shift during a presumed Trump Administration in 2025. Although historically, the US has left gaming oversight to the states, these analysts believe the increasing scale of quasi-gambling has become impossible to ignore. While the incoming administration might be pro-gambling, that stance also means they could be more open to hearing legitimate gambling businesses’ concerns about these grey products. According to Regulus, the feds might first clarify what is not allowed, but typically, government actions evolve beyond mere clarifications.

Sweeps casinos highlight the difficulty. The Deceptive Mail Prevention and Enforcement Act provides a partial federal carve-out for sweepstakes. Yet, many sweeps casinos function more like quasi-casinos than promotional platforms, contends Regulus. The group proposes that “this Gordian Knot” demands a strong legislative fix. Piecemeal solutions or half-measures, they argue, will only multiply complexities.

DFS 2.0—a next generation daily fantasy approach—falls in a similar grey zone. Regulus wonders how lawmakers will categorize it if federal legislators step in. As for sports CFDs, the concept launched by Crypto.com before Christmas 2024 stands as another example. On the surface, these derivatives serve investment functions. However, once they accept bets linked to sporting outcomes, states risk losing regulatory or taxing authority. “If CFDs can offer sports,” says Regulus, “the states have just lost their right to regulate and tax sports betting.”

The pivot from “betting” to “investing” potentially draws the interest of federal finance agencies. It’s not just an unregulated gap—CFD offerings already have a recognized regulatory framework under securities or commodity laws. So states can’t easily clamp down. Instead, the feds would have to step in and declare how these offerings integrate or conflict with gambling regulations.

While a potential federal clampdown looks probable, states themselves remain unconvinced. US gambling history is rife with blurred lines, fought out in courts or legislation. However, the explosion of quasi-gambling might be something new. Regulus underscores how overshadowed states’ rights become if a large chunk of gambling morphs into “investing.” They argue that pro-gambling elements, ironically, will be the ones calling for guidance to protect recognized operators and unify standards.

Ultimately, the conclusion is that the federal government has been “left with little choice.” For regulated operators, that means 2025 could transform US gambling. If legislators decide to intervene, it might define the post-PASPA era in ways nobody anticipated. The question for stakeholders is: will they cheer the clarity, or fear an overreach?

Regulus Partners anticipates a federal response in 2025 to clamp down on quasi-gambling products overshadowing local control. They highlight DFS 2.0, sweepstakes casinos, and sports CFDs as prime examples straining the current state-based framework. In the eyes of operators, such intervention could quell legal uncertainties and standardize the market. But states could lose some autonomy, and new complications will inevitably arise. As the US iGaming arena continues to evolve, the next year may prove to be a turning point, reshaping everything from daily fantasy expansions to innovative derivatives-based sports betting.