| | | | |  | | By Sam Sutton | | Presented by |  | | | Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.
| | It’s boom times for the legal bookmakers. Five years after the Supreme Court gave the green light for state governments to legalize sports betting marketplaces, customers in 38 states and the District of Columbia wagered more than $100 billion on football, basketball and everything in between. The rapid emergence of online gambling powerhouses like FanDuel and DraftKings has pumped hundreds of millions of dollars of new revenue into cash-strapped state budgets, But for Washington policymakers, the sudden ubiquity of regulated mobile sportsbooks has also led to tough policy questions affecting everything from personal finances to public health. Lawmakers and regulators are dialing up their scrutiny of the industry as reports about the recent resurgence of gambling addiction and catastrophic losses incurred by consumers continue to mount. A study published by the National Bureau of Economic Research last month found that legalization leads to higher credit card balances, a reduction of available credit and declines in net investments in financial markets — particularly among financially constrained households. The Consumer Financial Protection Bureau on Monday published a new analysis that found costly cash advances on credit cards spiked after sports gambling is legalized at the state level. It’s a sign that consumers are tapping borrowing products in order to place wagers through online sportsbooks, and the regulator advised state gaming regulators to consider placing limits on online sportsbooks’ acceptance of credit cards or require them to post special disclosures. “It's just this wild west environment that is going to really cause a lot of damage,” said Rep. Paul Tonko (D-N.Y), who introduced legislation with Sen. Richard Blumenthal (D-Conn.) earlier this year designed to force the industry to implement new consumer protection safeguards — including a prohibition on credit card deposits. The speed of the industry’s growth created a “cart-before-the-horse” situation, he added, and now policymakers have “take it back a bit and make certain that people are protected.” Other lawmakers have also taken note. Senate Judiciary will hold a hearing later this morning exploring pitfalls that have emerged since sports gambling went mainstream. Sens. Mike Lee (R-Utah) and Peter Welch (D-Vt.) sent a letter to Federal Trade Commission Chair Lina Khan and Assistant Attorney General Jonathan Kanter earlier this month urging the regulators to investigate FanDuel and DraftKings for antitrust violations that may have harmed consumers. An investigation “is especially important in a new industry like sports betting where the risk of addiction is far greater than most industries,” they wrote. FanDuel and DraftKings did not respond to requests for comment. The industry’s allies contend that regulated operators are a much better alternative than illicit — and occasionally predatory — bookmakers that dominated gambling marketplaces prior to legalization. FanDuel, DraftKings and other online operators have funded industry groups dedicated to research and responsible gaming. “Americans have been betting on sports for as long as there have been sports to bet on,” said Joe Maloney, a senior vice president for strategic communications at the American Gaming Association. “Certainly the expansion and the scale of which it's taken place, it's going to invite a certain level of federal interest and that is completely warranted, and it's an exercise that we're happy to participate in.” Notably, Maloney added, the upcoming Senate Judiciary hearing will not feature direct testimony from anyone in the industry. In written testimony, AGA President and CEO Bill Miller encouraged regulators and law enforcement agencies to crack down on illegal betting marketplaces. “Prohibition doesn’t work,” he wrote. “Strong state regulation does.” It’s TUESDAY — Your host is headed out to California for some family time through the Christmas holiday. My talented colleagues will be filling in over the next week. I can’t wait to rejoin you in the new year, it’s going to be a very busy 2025. In the meantime, email me tips, suggestions or gossip at ssutton@politico.com.
| | A message from Capital One: Capital One recently announced our historic, five-year, $265 billion community benefits plan in connection with our proposed acquisition of Discover to advance economic opportunity and financial well-being. This plan is twice as large as any other community commitment developed in connection with a bank acquisition and demonstrates that the combined Capital One and Discover will create an opportunity to provide more lending, investment, and services for underserved communities than either institution would undertake individually. Important information: CapitalOneDiscover.com | | | | | | November retail sales data is out at 8:30 a.m. … The Federal Deposit Insurance Corp. meets at 10 a.m. … The National Credit Union Administration meets at 10 a.m. … SoftBank’s promise — SoftBank Group CEO Masayoshi Son visited Donald Trump at Mar-a-Lago on Monday and pledged to invest $100 billion in U.S. projects over the next four years. It’s unclear how the tech giant will make good on that promise — as The WSJ’s Alex Leary and Eliot Brown report, SoftBank only has $30 billion on hand — but that didn’t stop Trump from asking Son to double his pledge to $200 billion. (Son made a similar high-profile pledge after Trump secured his first term in 2016.) — Son’s visit is a capstone of sorts to the corporate world’s recent embrace of Trump. Apple CEO Tim Cook dined with the president-elect on Friday. Mark Zuckerberg, as well as Google CEO Sundar Pichai and cofounder Sergey Brin, have also visited. Business is surging at lobbying firms with ties to the Trump world, Caitlyn Oprysko reported last week, and financial industry leaders are bullish on what the new administration will mean for their firms and the broader economy. — As Myah Ward, Lisa Kashinsky and Gabby Miller report: “Donald Trump is undergoing quite the fêting ahead of his second term — and it’s a whole lot cozier than his descent into Washington eight years ago.” What else happened at Mar-a-Lago? — Trump’s press conference with Son was expansive, to say the least. The president-elect weighed in on the polio vaccine, recent drone sightings over New Jersey and a possible pardon for embattled New York City Mayor Eric Adams, Megan Messerly reports. He also threatened to fire federal employees who don’t return to the office. — The American Federation of Government Employees President Everett Kelley, the leader of the largest federal workforce union, said in a statement that his workers’ collective bargaining agreements are “binding and enforceable under the law. We trust the incoming administration will abide by their obligations to honor lawful union contracts. If they fail to do so, we will be prepared to enforce our rights.”
| | | | Billions in spending. Critical foreign aid. Immigration reform. The final weeks of 2024 could bring major policy changes. Inside Congress provides daily insights into how Congressional leaders are navigating these high-stakes issues. Subscribe today. | | | | | | | | Not there yet — As of Monday night, lawmakers still hadn’t finalized the details of a stopgap spending patch, pushing the government closer to its shutdown deadline, Katherine Tully-McManus, Jennifer Scholtes and Meredith Lee Hill report. — But a deal on a provision limiting outbound investments in Chinese companies looks very likely. Eleanor Mueller reports that congressional leaders are set to include a proposal that would restrict U.S. investments in China as part of the short-term spending bill. David Scott on the ropes — House Democrats are poised to oust another senior panel leader after ailing Rep. David Scott (D-Ga.), 79, lost a vote in the influential Steering panel Monday, Meredith Lee Hill, Daniella Diaz and Nicholas Wu report. The result all but ensures Scott will lose his bid to stay on as the top Democrat on the Agriculture panel next year. — POLITICO’s Josh Siegel: “Congress fails to reach deal to ease energy permitting rules” First in MM: Hill, McHenry warn regulators to preserve documents — The outgoing and incoming chairs of the House Financial Services Committee warned financial regulators Monday to “preserve information” that may be subject to the panel’s oversight efforts next year, Jasper Goodman reports. In letters to Treasury, the Federal Reserve, the SEC and other regulators, GOP Reps. Patrick McHenry of North Carolina and French Hill of Arkansas asked the agencies to respond in writing by the end of the year with how they "will ensure all records" relevant to their request will be preserved. They also reiterated previous calls to halt any rulemaking for the remainder of President Joe Biden’s term. Durbin previews Bitcoin ATM bill — Senate Majority Whip Dick Durbin plans to introduce legislation "in the next few weeks" that would aim to prevent Bitcoin ATM scams, Eleanor reports. The Illinois Democrat said on the Senate floor Monday that he wants the bill to require daily transaction limits for new customers and direct operators to scan for fraudulent transactions. Durbin led letters to operators on the issue in September.
| | | | A message from Capital One:   | | | | | First look: Block call to action — Victoria Guida reports that Block (formerly Square) is out with a new report this morning on payment scams that digs into the various ways people are getting ripped off by fraudsters through platforms like their own CashApp, as well as steps the firm is taking to stop it. In it, Block calls for more information-sharing across the system — among financial services firms, law enforcement, social media companies, ISPs, etc., as well as more resources for law enforcement. “It’s an industry-wide problem,” said Brian Boates, Block’s science lead. But while payment companies are seeing similar types of scams, “on the data-sharing side, things are a little more nascent.”
| | | | Write your own chapter in the new Washington. From the Lame Duck Congress Series to New Administration insights, POLITICO Pro delivers intelligence across 22+ policy areas to help you anticipate and navigate change. Discover how a Pro subscription empowers you. Learn more today. | | | | | | | | Powell’s balancing act — Federal Reserve Chair Jerome Powell will once again have to strike a balancing act later this week when he announces the central bank’s rate decision. Inflation has been stickier than many had anticipated and the labor market shows little sign of weakness. “Right now, either a cut or a hold could be justified,” Jon Faust, who served as a senior adviser to Powell from 2018 until earlier this year, told The WSJ’s Nick Timiraos. Guidance on the path of the fed-funds rate is likely to be “more important than whatever they decide about the December meeting in particular.” — Fed policymakers are likely watching recent worker productivity gains closely as they weigh next steps, Reuters’s Howard Schneider reports. Here we go — Many expect the Fed to pare back their plans for rate cuts in 2025. That could set up a major conflict with Trump, who claimed during the campaign that he would bring down both inflation and interest rates. — Fed officials have their guard up, The NYT’s Jeanna Smialek reports: “Fed analysts try to avoid casually discussing tariffs in email or Microsoft Teams meetings, wary that the information could become public and make the Fed look anti-Trump, according to one staff economist who spoke on the condition of anonymity to discuss the sensitive matter. Hallway chatter has taken a negative tone but is often studiously generic and apolitical, according to people familiar with the mood inside the building who also requested anonymity. And while Fed officials and economists have had to begin to consider what Mr. Trump’s promised policies might do to growth and inflation, they have avoided publicly speculating.”
| | Do you think so, doctor? — Bloomberg’s Christian Dass and David Marino: “Investors anticipating another calm year in 2025 should be on guard for more shocks like the one seen in August as uncertainty around Donald Trump’s tax and tariff policies threaten to roil markets.”
| | A message from Capital One: Capital One recognizes the critical role small businesses play in their communities. We have long been committed to empowering underserved entrepreneurs, helping to ensure that small business owners have equal access to critical resources. As part of our proposed acquisition of Discover, our community benefits plan commits over $15 billion to small businesses and businesses in low- and moderate-income communities to improve access to credit and capital.
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