The American Gaming Association (AGA) has said this week that it estimates that U.S. states have missed out on up to $1 billion in gaming tax revenue due to the rise of event contracts offered by prediction market platforms.
Key Takeaways
- The AGA says prediction markets have cost states more than $1 billion in gambling tax revenue.
- The group argues sports contracts should fall under state gambling laws, not only federal commodities rules.
- Kalshi’s expansion has intensified conflict between state regulators, tribal interests, gambling operators, and the CFTC.
The estimate was outlined by AGA President and CEO Bill Miller during an appearance on CNBC’s Squawk Box on Thursday. Miller framed the issue as a public revenue problem rather than a narrow fight between gambling companies and newer financial-market platforms.
“It’s about states and tribes that are losing literally a billion dollars today in state and tribal revenue that would otherwise go to fund important community projects,” he said.
The AGA has become one of the loudest industry opponents of prediction markets offering sports-related contracts. Its position is that platforms that allow users to trade on game outcomes operate in a space that should be regulated under state gambling laws, not only federal commodities rules.
That distinction matters as state-licensed sportsbooks and casinos pay gambling taxes, licensing fees, and other regulatory costs. Prediction market platforms argue that their products are federally regulated event contracts, which places them under a different legal framework.
The dispute has widened as platforms such as Kalshi have expanded their reach through finance and brokerage channels. The AGA's $1 billion figure gives state officials and tribal operators a clearer fiscal argument as they challenge the sector.
It also raises the stakes in a broader jurisdictional fight now playing out between state regulators, tribal gaming interests, gambling operators, and the Commodity Futures Trading Commission (CFTC).
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CFTC proposal reaches White House review
The AGA's revenue argument is unfolding as the federal government weighs how to regulate prediction markets. A CFTC proposal covering platforms such as Kalshi and Polymarket is now under review by the White House Office of Management and Budget.
The review follows a January move by CFTC Chairman Michael Selig to scrap an earlier proposal that would have barred sports and political contracts. Selig said at the time that the agency planned to write new rules for prediction markets instead. The CFTC has also argued in public statements and in court that it has exclusive authority over federally regulated prediction markets.
The filing arrived the same day President Donald Trump publicly backed that position.
In a social media post, Trump said the CFTC's authority over prediction markets should be preserved and criticized Minnesota Gov. Tim Walz, Illinois Gov. JB Pritzker, New York Attorney General Letitia James, and former New Jersey Gov. Chris Christie.
Christie now serves as a strategic adviser to the AGA. He has argued that sports prediction markets constitute illegal sports gaming, aligning him with the association's broader push for state-level gambling oversight.
