States Reportedly Losing Tax Revenue To Prediction Markets
The American Gaming Association (AGA) has reported that states and tribes have lost over $1 billion in tax revenue due to the explosive rise of prediction markets.
AGA president and CEO Bill Miller views platforms like Kalshi and Polymarket as direct competitors with an unfair advantage: differential regulations. However, the prediction market sector has strongly disputed Miller’s claims, exposing a deeper battle over the future of American wagering.
The Big Number
In a recent appearance on CNBC, Miller accused prediction markets of essentially functioning as unregulated sportsbooks. He argued that their distinct regulatory framework has allowed prediction markets to achieve rapid, unchecked nationwide success.
The platforms’ self-description as financial investing tools does not sit well with Miller, who claims that sports-related event contracts drive the majority of their trading volume.
The AGA representative also claims that the lost money has direct consequences for communities.
“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”, Miller stated.
Prediction Markets Respond
The Coalition for Prediction Markets responded in a post on X, pointing out that the numbers cited by Miller aren’t backed by any reliable source and cannot be taken into account in a discussion about nationwide regulations.
Kalshi spokesperson Elisabeth Diana also doubts the information provided by the AGA.
“This is fake math from casinos, who are worried about losing their monopoly power. Square that math with the fact that the U.S. gaming industry reached a record high last year of $78.7 billion in revenue.”
Diana strongly concluded, “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.”
Political Tension Ahead
Miller is not the only one arguing that prediction markets, especially those focused on sports contracts, amount to sports betting, and thus should be regulated by their local frameworks. However, prediction markets are federally regulated by the Commodity Futures Trading Commission, an organization that has received the direct support of President Donald Trump.
The dispute over who has authority to regulate prediction markets has escalated into a legal and political battle. State-level lawmakers have tried to implement local legislation on prediction markets, but that has resulted in the CFTC suing the states.
Miller states that AGA accepts the CFTC’s authority over commodities and financial instruments, but the CEO has a very different view on a fundamental aspect.
“Where we differ strongly is the belief that the CFTC is enabling these prediction markets to operate national sportsbooks with very little to no regulatory oversight,” he said.