AGA Points to Over One Billion Dollars in Missed Revenue from Prediction Market Growth
The American Gaming Association has released estimates showing that states and tribes across the country have lost more than one billion dollars in potential tax revenue along with tribal revenue because of expanding unregulated prediction markets which the group labels backdoor sports betting and the organization presented these figures through public statements including a notable appearance by its president and chief executive on CNBC Squawk Box in recent weeks.
Details Behind the Revenue Estimates
Bill Miller who leads the AGA as president and CEO described how these missed collections would normally flow into community projects and state programs yet the platforms operating in this space fall under CFTC oversight rather than state gambling regulators which creates what the association views as an uneven regulatory environment and data from the group indicates the shortfall exceeds one billion dollars when combining both state tax losses and tribal revenue impacts while operators continue to offer event contracts that resemble traditional sports wagers without the same licensing requirements.
Regulatory Oversight Concerns Raised by Industry Group
Those familiar with the AGA position note that the organization has long advocated for consistent rules across all forms of wagering and in this case Miller highlighted during the television segment how prediction market activity bypasses standard tax structures that legal sportsbooks must follow and experts observing the exchange point out that platforms such as Kalshi have grown by offering contracts tied to real world outcomes including sports related events which draws direct comparison to regulated betting products yet avoids the same revenue sharing obligations that support local economies in dozens of jurisdictions.
Observers note the CFTC framework allows certain event contracts to trade on designated platforms and the AGA argues this setup effectively permits what amounts to sports betting without state approval or tribal compact agreements which leads to the calculated revenue gap and figures released by the association tie directly to the expansion of these markets over the past several years as participation has increased without corresponding contributions to public funds.
Response from Prediction Market Operators
Kalshi and similar operators have pushed back against the AGA numbers with representatives describing the estimates as fake math and these companies maintain that their contracts differ from traditional sports betting because they focus on broader event outcomes rather than direct game results and the rebuttal emphasizes that prediction markets operate under federal commodity rules which provide their own compliance layer separate from state gaming commissions.
People who have reviewed the competing claims see a clear divide where the AGA stresses lost opportunities for community funding while the platforms argue their model generates distinct economic activity without overlapping existing tax bases and the exchange between the sides has played out through media appearances and public statements that continue to draw attention from lawmakers and regulators alike as of June 2026.
Broader Context of Market Expansion
Analysts tracking the sector point to steady growth in prediction market volume which includes contracts on elections weather and sports adjacent events and this expansion coincides with the period when many states have legalized and taxed sports betting under controlled frameworks that require licensing fees and revenue shares and the AGA presentation connects these parallel developments by suggesting that unregulated alternatives capture market share without returning portions of the handle to the jurisdictions where participants reside.
Those reviewing the numbers find that the one billion dollar estimate combines projected tax rates applied to estimated handle with tribal revenue shares that would apply under standard compacts and Miller noted on the CNBC program that such funds typically support education infrastructure and public services which makes the shortfall noticeable at the state and local level where budgets rely on consistent gaming contributions.
Industry observers have observed that the debate centers on definitions of what constitutes sports betting versus allowable event contracts and the CFTC has maintained its authority over certain platforms while states seek clarity on where lines should be drawn and the AGA continues to present its calculations as evidence that current oversight leaves measurable gaps in revenue collection across multiple regions.
Conclusion
The exchange between the American Gaming Association and prediction market operators underscores ongoing questions about regulatory boundaries and revenue allocation in the evolving wagering landscape and the figures released by the AGA along with the counter statements from companies like Kalshi provide specific points of reference for policymakers evaluating oversight options and the situation remains active as both sides continue to articulate their positions through public channels.