Sporttrade’s CEO has urged changes to the regulatory framework of US betting markets in an open letter to the country’s regulators and legislators. Alex Kane, who is the founder of the sports betting exchange, called for “a sincere effort to welcome innovative companies” in the letter published on Thursday (Mar. 13).
Kane’s comments in Straight To The Point take a different approach from the recent negativity in the industry. He points out the industry’s growing challenges but attempts to focus on solutions and a way forward.
He argues that the industry’s rigid regulations are stifling innovation and pushing players toward alternative, less-regulated markets.
.@SenJoeAddabbo would you be open in working together to create an “innovators track” of licensure and taxation for American startups and entrepreneurs to come into the New York sports betting market?
This approach would grow the pie and thwart unregulated gaming to your state.… https://t.co/ZO6ZeoIdGy
— Alex Kane (@a_kane47) March 5, 2025
He wrote: “If the goal is to have as many players as possible choosing to play in your regulated market, there must be significant changes to your regulatory approach. You must consider making a sincere effort to welcome innovative companies into your regulated market.”
His open letter comes at a time when there have never been more ways for operators to reach customers outside the traditional state-by-state regulations.
From platforms using the “social gaming with sweepstakes prizing” model to prediction markets regulated by the Commodity Futures Trading Commission (CFTC), which operate similarly to Sporttrade’s peer-to-peer exchange wagering, as well as the ever-present offshore sportsbooks, the landscape is packed with alternatives.
A newsletter first! A guest post from @sporttrade_app Founder Alex Kane (@a_kane47) who penned an open letter to US Sports Betting Legislators and Regulators calling for changes to the regulatory framework to foster innovation and entrepreneurship.
I really loved this particular…
— Steve Ruddock (@SteveRuddock) March 13, 2025
Kane calls for a more open and entrepreneurial market
Kane states that most bettors do not differentiate between regulated and unregulated platforms. Instead, they gravitate toward services that offer the best prices, products, and user experiences.
“I can’t recall one instance where that player makes any meaningful distinction between a sports betting platform regulated by a gaming commission, and one that is not, when deciding where to play,” Kane writes. “They simply do not care.”
Rather than cracking down on alternative betting options, Kane suggests that regulators should focus on fostering innovation within their own frameworks. He proposes that regulators embrace innovation, differentiate licensing requirements, and adopt risk-based regulation. He also urged federal lawmakers to eliminate the excise tax, which disproportionately impacts licensed operators while giving unregulated competitors a cost advantage.
He adds: “Let me say in no uncertain terms: without an overhaul that creates a realistic pathway for entrepreneurs to participate in your market, you will cede more tax revenue, jobs, venture capital, and player participation to alternative regulatory frameworks.”
Featured image: Canva
