The battle between prediction markets and the American Gaming Association crossed the $1 billion mark – of sorts - on Thursday. The AGA's tracker of "State Gaming Tax Dollars Lost Since Prediction Markets Began Offering Sports Event Contracts" surpassed $1 billion.
The announcement of that number triggered a furious response from prediction market Kalshi.
The AGA claims the figure signals the amount of money states and tribes have lost in potential tax revenue due to prediction market trades. Prediction markets are federal regulated through the Commodities Futures Trading Commission. The AGA launched its "Gaming Tax Dollars Lost" tracker last year. Kalshi became the first prediction market to trade in sports-event contracts ahead of Super Bowl 59 in 2025.
"Prediction market platforms are offering illegal sports betting nationwide outside the state and tribal regulatory frameworks that protect consumers. They override voter decisions, bypass key consumer protections, ignore state and tribal laws, and avoid licensing and taxes," the AGA says on its website
But not everyone buys the number – or the AGA's argument.
"This is fake math from casinos, who are worried about losing their monopoly power. Square that 'math' with the fact that the US gaming industry reached a record high last year - $78.7 billion in revenue," Kalshi spokesperson Elisabeth Diana told RotoWire.
"This is an industry that preys on people who lose. Of course they're ok spreading lies. People are coming to prediction markets because they're fairer, safer, and less predatory than casinos." - Kalshi spokesperson Elisabeth Diana
The flap comes as prediction market platforms face mounting legal scrutiny across the country.
The AGA's $1 billion number hit on the same day that legacy gaming giant Caesars announced its sale to Fertitta Entertainment. The blockbuster all-cash deal is valued at approximately $17.6 billion, but that includes the assumption of roughly $11.9 billion in Caesars debt.
AGA Holds Firm In Fight Against Prediction Markets
AGA President Bill Miller continued his open antipathy toward prediction markets during an appearance on CNBC today.
"We recently had 41 Attorney's General from around the country weighing in saying the (Commodities Futures Trading Commission) plays an important role in the nation's economy, but they're not the regulator of national sportsbooks. 41 attorneys general — that's from every political stripe that there is in this country. It's not about the AGA or the gaming industry, it's about states and tribes that are losing literally $1 billion in state and tribal revenue that would otherwise go to fund important community projects and pay taxes to these states." - AGA President Bill Miller to CNBC
To Miller's point, more than a dozen states and Native Indian Tribe have engaged prediction market operators like Kalshi, Polymarket and Robinhood, in litigation, hit them with "cease-and-desist letters" and/or proposed or passed legislation to ban prediction markets outright.
Meanwhile, the CFTC has joined several of those cases on behalf of prediction markets.
Wednesday, federal prosecutors in New York and trading regulators in Washington charged a Google engineer with insider trading after he made more than $1.2 million in Polymarket trades.
President Donald Trump Tuesday jumped squarely into the growing legal and political fight over prediction markets, declaring it was "critically important" for the Commodity Futures Trading Commission to maintain "exclusive authority" over the rapidly expanding industry.
In a lengthy Truth Social post, Trump praised CFTC Chairman Michael Selig and blasted state officials who have challenged companies like Kalshi, Polymarket, Robinhood and Crypto.com over sports-event contracts and other prediction-style trading products.
"Under my leadership, we are setting 'rules of the road' that are the Gold Standard for the States," Trump wrote. "We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules!"
