A recent American Gaming Association (AGA) survey found sports betting and iGaming stakeholders are bullish on continued industry growth but are concerned about the impact of prediction markets.
Key Takeaways
- Despite several global and U.S. economic issues, gaming executives plan for higher revenue and more investment.
- Prediction markets were labeled a “very significant” risk to the gaming industry.
- Still, positive sentiment is the highest since 2023.
The AGA reported on Thursday that its Gaming Industry Outlook, which surveyed 26 senior-level executives from major gaming companies, suppliers, and operators, found more than 60% are expecting higher revenue and stronger balance sheets while also planning for more capital investments over the next 12 months.
It’s the highest level of positive sentiment reached by the group since the third quarter of 2023 and comes despite high U.S. inflation rates, rising gas prices, and the war with Iran.
“The legal state- and tribal-regulated gaming industry continues to demonstrate resilience and adaptability in a dynamic economic environment,” said AGA president and CEO Bill Miller. “Operators are focused on investing in innovation and delivering world-class entertainment, while also navigating an evolving competitive and regulatory landscape.”
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Prediction threat
Economic activity, measured by the Gaming Conditions Index across a variety of categories, increased 1.5% year over year during Q1 2026, the AGA said. The same activity grew over the last two quarters, as well, helping raise belief among U.S. sports betting and online casino stakeholders that profits and success will continue.
Executives believe tax cuts for higher-income households will help positive consumer spending, with disposable income growth expected.
However, the rise of prediction market platforms, like Kalshi and Polymarket, offering sports event contracts in nearly every U.S. state, is seen as a “very significant” threat to 81% of the executives surveyed.
“Illegal sports betting through sports event contracts is increasingly encroaching on legal, state-and tribal-regulated operators,” said Miller. “It’s clear the legal, regulated industry views this is a threat, and will continue to fight back and protect the integrity of our industry.”
Prediction markets began getting involved in sports contracts in early 2025, and many have since evolved into sportsbook-like markets, including spreads, totals, and moneyline offerings on the NFL, NBA, MLB, NHL, NCAA, and other sports leagues.
Shifting landscape
Tribal gaming leaders have spoken out against prediction markets, and more than a dozen states are entangled in legal battles against trading exchanges. FanDuel and DraftKings, two of the biggest sports betting and online casino brands in the U.S., along with Fanatics, used to be members of the AGA but left the trade group after deciding to launch prediction market platforms.
However, they are not operating event contracts - called “swaps,” not bets - in jurisdictions where they also have legal sportsbooks. Caesars, MGM, Rush Street, and PENN Entertainment are among AGA members that operate sports betting but not prediction market sites.
Prediction markets are federally regulated by the Commodity Futures Trading Commission, while sports betting and online casinos are licensed and regulated at the state level.
Other concerns
The AGA’s members weren’t solely focused on prediction markets. Gaming executives identified inflation, tariffs, geopolitical risk, and federal regulation as other areas of concern.
The biannual survey, conducted between March 23 and April 8, found 54% believe employee wages are the top expense issue, followed by tax and regulatory policy change. Also, 42% of responding executives said competition from new forms of gaming was a concern, up from 25% in Q3 2025.
Executives are again expecting promotional spending to decline.
