American Gaming Association Flags Over $1 Billion in Lost Revenue from Unregulated Prediction Markets

The American Gaming Association has released estimates showing that states and tribes have missed out on more than $1 billion in tax and tribal revenue because of the expansion of unregulated prediction markets, and the organization describes these platforms as backdoor sports betting that operate outside established regulatory frameworks. Bill Miller, who serves as president and CEO of the AGA, presented these figures during a CNBC Squawk Box appearance where he explained that the lost funds would otherwise flow toward community projects across various jurisdictions. Miller emphasized the role of the Commodity Futures Trading Commission in overseeing these platforms, and he argued that the current approach allows prediction markets to function in ways that directly compete with regulated sports betting options without contributing to state or tribal coffers. The AGA positions the situation as one where regulatory gaps have created an uneven playing field, and data from the group ties the revenue shortfall specifically to the growth of these event-based contracts that mirror traditional sports wagers.

Scope of the Revenue Impact

Figures released by the American Gaming Association break down the estimated losses across multiple states and tribal lands, and they show how prediction market activity has diverted potential tax collections that typically support education, infrastructure, and public health initiatives. Observers note that the $1 billion threshold represents cumulative shortfalls built up over recent periods of market expansion, while the AGA continues to track activity on platforms that offer contracts tied to sports outcomes and other events.

States with established sports betting programs have seen portions of their expected collections redirected, and tribes operating gaming facilities report similar patterns where prediction markets capture interest without the same licensing and revenue-sharing requirements. The association connects these trends directly to the CFTC's regulatory stance, which permits certain event contracts to trade on designated platforms even when they involve elements that resemble sports betting.

Criticism of Federal Oversight

During the televised segment Miller outlined specific concerns about how the CFTC reviews and approves contracts on prediction market exchanges, and he pointed out that some offerings function as direct alternatives to state-regulated betting products. The AGA maintains that clearer distinctions and stronger coordination with state authorities could close these pathways, and Miller called for renewed attention to how these markets affect local economies that depend on gaming revenue streams.

Those familiar with the regulatory landscape have observed that the CFTC has authorized a range of event contracts in recent years, and this approach has allowed certain platforms to expand their offerings while states work within their own frameworks for taxation and consumer protections. The association's statements highlight the contrast between licensed operators that remit taxes and the prediction market sector that operates under different federal guidelines.

Pushback from Platform Operators

Kalshi, one of the prediction market operators referenced in the discussion, has responded by labeling the AGA's calculations as fake math, and the company maintains that its contracts differ fundamentally from traditional sports betting products. Representatives from the platform argue that the estimates overstate the overlap and fail to account for the distinct nature of event-based trading, which they say serves different user interests and risk profiles.

The exchange has pointed to its own compliance with CFTC rules as evidence that it operates within legal boundaries, and it disputes the characterization of its activities as unregulated sports betting alternatives. Kalshi's statements emphasize that its market structure and contract design set it apart from state-licensed betting, while the AGA continues to present data linking prediction market volume to measurable revenue displacement at the state and tribal level.

Context for Community Funding

Revenue from regulated gaming often supports specific community programs, and the AGA notes that the estimated $1 billion shortfall removes resources that would otherwise fund those initiatives in states and on tribal lands. Miller described the situation as one where the absence of tax contributions from prediction market activity leaves gaps in budgets that gaming taxes normally help fill, and the association has shared examples of projects that rely on these collections.

States and tribes have historically used portions of gaming revenue for education grants, public safety measures, and economic development efforts, and the AGA connects the growth of prediction markets to reduced allocations in those areas. The estimates reflect both direct tax losses and the indirect effects on tribal gaming operations that share revenue under existing agreements.

Conclusion

The American Gaming Association's estimates place the revenue impact above $1 billion and tie it to the expansion of prediction markets operating under CFTC oversight, while platform operators such as Kalshi reject the methodology behind those numbers. The discussion centers on regulatory distinctions between licensed sports betting and event contracts, and it highlights how these differences affect collections that support state and tribal programs. Miller's comments on CNBC drew attention to the issue, and responses from the prediction market sector indicate ongoing disagreement over how the figures should be calculated and interpreted.