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The Gambling Wire: VGW Pays New York $8M as Robinhood Takes Prediction Fight to SCOTUS

By jili tutorial · September 11, 2026

The Gambling Wire: VGW Pays New York $8M as Robinhood Takes Prediction Fight to SCOTUS

A Busy Week Across Gambling, Law, and Product Launches

The past week in the gambling industry has been shaped by legal and market moves on three big fronts: sweepstakes casinos, prediction markets, and football-season betting products. While prediction markets have generated the most sustained headlines in recent months, it was New York’s $8 million settlement with VGW that anchored the news cycle. At the same time, Robinhood and Kalshi took separate legal paths after a key Ninth Circuit ruling on sports event contracts, Underdog filed lawsuits against five states, and a wave of operators—including Betr, Caesars, FanDuel, and Novig—rolled out new products and campaigns around the start of the NFL season.

The Big Story: VGW Pays $8 Million in New York Sweepstakes Settlement

How Sweepstakes Casinos Work

Online sweepstakes casinos use a dual-currency system to offer casino-style games while attempting to stay outside traditional gambling laws. Players buy Gold Coins, which have no cash value and are used only for entertainment. As part of a promotional model, players may receive Sweeps Coins, which are marketed as free bonuses. If Sweeps Coins can be redeemed for cash or prizes, state regulators often view the entire arrangement as a form of gambling.

In VGW’s case, New York investigators concluded that the connection between player spending and Sweeps Coins was too direct to be considered a giveaway. That distinction is central to the state’s case.

A Decade of Sweepstakes Operations in New York

On Sept. 9, New York Attorney General Letitia James announced an $8 million settlement with VGW, the company behind several online sweepstakes casino platforms. According to the Attorney General’s Office, VGW began offering casino games to New Yorkers through Chumba Casino in 2012, then added Global Poker in 2016 and LuckyLand Slots in 2018.

The platforms ran on a dual-currency model built around Gold Coins and Sweeps Coins. Players could spend money on Gold Coins for entertainment, receive Sweeps Coins as a promotional bonus, and then redeem Sweeps Coins for cash or prizes.

New York investigators found that players could obtain roughly one Sweeps Coin for every dollar they spent on the platforms. That finding undercut VGW’s position that the coins were provided for free and therefore did not constitute gambling. The investigation concluded that VGW’s operations violated multiple state laws, including statutes against the promotion of gambling, possession of gambling records, and repeated fraudulent or illegal acts.

What the Settlement Requires

The settlement imposes a significant financial penalty and new obligations on VGW. The company must pay $8 million in disgorgement, restitution, penalties, and costs. It must also, for one year, allow certain former New York customers who did not receive VGW’s earlier phaseout notice to request redemption of eligible Sweeps Coins remaining in their accounts as of June 2, 2025.

The settlement follows a cease-and-desist letter James’ office sent in April 2025. After receiving that letter, VGW stopped offering Sweeps Coins in New York. The state then passed a law banning dual-currency online sweepstakes casinos, making New York one of roughly a dozen states that have targeted the sector.

James framed the settlement as a victory for state gambling protections. “Our state’s gambling laws are designed to protect New Yorkers,” she said. “Online sweepstakes casinos like Chumba Casino, Global Poker, and Luckyland Slots posed a dangerous threat to New Yorkers and their financial and mental health.”

VGW’s Response: No Admission of Liability

VGW issued its own response later that week, saying it “welcomes the conclusion of this matter.” The company stressed that it had already voluntarily stopped allowing New York players to collect Sweeps Coins on June 2, 2025, before the settlement was reached.

VGW also pointed to language in the Assurance of Discontinuance stating that the agreement is “not intended, and should not be construed, as an admission of liability” by the company. VGW said it will continue operating its online social games in New York solely through Gold Coins play.

Why the Settlement Matters

The VGW deal is one of the largest state actions yet against the sweepstakes casino model. It shows how regulators are willing to trace dual-currency mechanics back to real-money play, reject “free play” arguments, and demand not only fines but customer redemption options. For operators in the sector, the settlement is a reminder that state attorneys general are closely watching how Sweeps Coins are marketed, priced, and redeemed.

Prediction markets allow people to trade contracts whose value depends on whether an event occurs. In the sports world, that can mean betting-style trades on game winners, player performances, or statistical milestones. The legal status of these products has become a major battleground because they can look a lot like sports betting, which states heavily regulate.

A recent Ninth Circuit ruling created a direct conflict with an earlier Third Circuit ruling in favor of Kalshi on the question of federal preemption. Now the fight is moving through multiple courts at once.

Robinhood and Kalshi Choose Different Next Steps

After the Ninth Circuit handed down its decision, Robinhood and Kalshi split strategies. Kalshi asked the Ninth Circuit to rehear its Nevada case en banc. Robinhood, meanwhile, filed a petition for a writ of certiorari with the U.S. Supreme Court, seeking review of the Ninth Circuit’s decision on sports prediction markets.

Gaming attorney Daniel Wallach called the dual moves a likely “tag-team strategy.” He suggested that getting a Ninth Circuit case to the Supreme Court quickly could allow the justices to consider the Ninth and Third Circuits’ divergent approaches to sports event contracts at the same time.

New Jersey has separately asked the Supreme Court to review the Third Circuit’s ruling in favor of Kalshi, which reached the opposite conclusion from the Ninth Circuit on federal preemption. A Supreme Court grant in any of these cases could produce a definitive national answer.

Arizona Moves to Vacate the Kalshi Injunction

The Ninth Circuit ruling is already creating ripple effects in lower courts. In Arizona, state officials are preparing to ask the Supreme Court to summarily vacate a May preliminary injunction that has blocked the state from enforcing its gambling laws against Kalshi’s sports event contracts.

In a Sept. 4 status report, Arizona said the Ninth Circuit’s ruling should result in the May preliminary injunction being vacated as it applies to sports contracts. The state is separately seeking a remand for further proceedings involving election contracts. Kalshi has indicated it will oppose the move, since it is still seeking rehearing of the Nevada decision. The CFTC requested until Sept. 11 to consider Arizona’s proposal.

More Operators Enter the Prediction-Market Fray

Underdog Sues Five States

Underdog has become the latest operator to take the prediction-market fight into federal court. Days after surrendering its daily fantasy sports licenses in seven states, Underdog filed lawsuits against regulators in Massachusetts, Ohio, Wisconsin, New Mexico, and Washington.

The lawsuits are designed to prevent those states from enforcing gambling laws against Underdog’s sports-event-contract business. Like other operators in this space, Underdog argues that the Commodity Exchange Act preempts state regulation, meaning states cannot block products that the federal commodities regime already governs.

Betr Goes Live With Polymarket-Powered Markets

On the product side, Betr has begun rolling out Polymarket-powered prediction markets to eligible users in select states. The launch is happening in beta, with a broader release planned later in the football season. Betr says it is the first consumer app to integrate with Polymarket.

The product will initially offer sports contracts before expanding into other event categories. It is part of Betr 2.0, which puts prediction markets in the same app as Picks, Social Sportsbook, Social Casino, and Arcade products. The move is a notable example of a consumer sports betting app adding a separate prediction-market vertical.

Fanatics Brings Injury Protection to Prediction Markets

Fanatics is taking one of its sportsbook features and applying it to prediction markets. The company is extending its Fair Play injury protection program to prediction-market trades, offering FanCash refunds on certain eligible player-prop trades affected by injuries.

The protection applies when a player exits during the first half due to injury and does not return. Fanatics is also offering Forward Progress Protection, which can return a trade amount in FanCash if negative yardage moves a player back below a cleared prop line. The program currently covers professional football and certain baseball markets, with additional sports expected to follow.

Novig’s Sydney Sweeney Campaign Draws Attention

Novig has generated a wave of attention with a provocative national advertising campaign featuring actress Sydney Sweeney. Sweeney has also joined Novig as a strategic partner and equity holder.

The “Novig is Just Sports” ad features Sweeney nude, strategically covered by sports equipment, and is intended to promote the company’s sports-only prediction market model. The campaign also takes an explicit shot at other prediction platforms by stressing that Novig does not offer markets on politics, war, or death. Novig promoted the spot on social media with the message “Confirmed: Sydney Sweeney knows ball.”

The campaign is set to continue through football season, with additional creative and activations planned for the fall.

Sportsbooks Gear Up for Football Season

The Rams Are Super Bowl Favorites—and Bettors Are On Board

With the NFL season underway, sportsbooks are rolling out new promotions, products, and contests. Bettors are already placing Super Bowl futures, and the Los Angeles Rams are the popular favorite.

DraftKings listed the Rams at +500 to win Super Bowl LXI, and 20.2% of its Super Bowl futures handle has backed Los Angeles. Buffalo ranks second with 9.8%, according to figures reported by ESPN. BetMGM also reported the Rams leading both its ticket and money percentages.

Caesars Sportsbook head of football Joey Feazel noted the unusual liability: “It’s usually not in this scenario of going into the season where we have a liability on the Super Bowl favorite.” ESPN added that no team entering the season at +500 or shorter has won the Super Bowl since the 1994 San Francisco 49ers.

Circa’s Football Contests Top $30 Million

Circa Sports is offering more than $30 million across its three major football contests this season. Circa Survivor carries a $20 million guaranteed prize, while Circa Million VIII guarantees another $6 million. The high-stakes Grandissimo Survivor contest, which requires a $100,000 entry fee, has already generated a $5.5 million pool from 55 entries.

New Products and Campaigns From Betr, Caesars, FanDuel, and Novig

The football season launch has become a key product moment across the industry. Betr has made prediction markets available in beta. Caesars has rolled out an updated sportsbook. FanDuel has been running its own football-season campaigns. And Novig’s Sweeney-led advertising push has become the most talked-about marketing blitz of the early season.

What to Watch Next

The Bottom Line

This week’s news shows how quickly the gambling landscape is shifting. Sweepstakes casinos face a growing wave of state enforcement and restrictive legislation. Prediction markets are caught in a high-stakes legal and regulatory split that could eventually be resolved by the Supreme Court. And the start of football season has given operators a reason to accelerate product updates and marketing campaigns. The only certainty for now is that the legal and competitive battles will continue on multiple fronts.