AGA Highlights Over $1 Billion in Missed Revenue From Unregulated Prediction Markets

The American Gaming Association has put forward an estimate that U.S. states and tribes have lost more than $1 billion in tax and tribal revenue because of growth in unregulated prediction markets, which the organization labels as backdoor sports betting. This assessment comes at a time when the industry continues to expand in June 2026, with operators offering event contracts that overlap with traditional sports wagering.

Bill Miller Addresses the Issue on National Television

AGA President and CEO Bill Miller presented these figures during a CNBC Squawk Box segment, where he explained that the missing funds would otherwise go toward community projects such as education, infrastructure, and public services. Miller pointed to the Commodity Futures Trading Commission's oversight of these platforms as a key factor allowing the activity to continue without standard state-level taxation or tribal revenue sharing agreements.

Those following the exchange noted that Miller framed the prediction markets as operating in a regulatory gray area that bypasses the licensing and tax structures applied to legal sportsbooks in more than 30 states. The appearance drew attention because it connected specific dollar amounts to ongoing debates about how federal agencies classify event-based contracts.

Details Behind the Revenue Estimate

According to the AGA presentation, the $1 billion figure reflects a combination of state taxes that would apply to sports betting handle plus tribal exclusivity payments that tribes receive in states with gaming compacts. Researchers who track market volumes have observed that prediction platforms have seen increased trading on sports-related outcomes, which the association argues functions as unregulated betting. The estimate covers activity through early 2026 and projects forward based on current participation trends reported by multiple operators.

Criticism Directed at Federal Oversight

The group directs its main critique at the CFTC for permitting these platforms to list contracts that mirror sports wagers without requiring the same compliance as state-licensed books. Miller stated that clearer boundaries would allow revenue to flow through established channels that already support state budgets and tribal government programs. Data from states that have legalized sports betting shows consistent collection of taxes ranging from 6 to 51 percent depending on the jurisdiction, providing a benchmark the AGA used in its calculations.

Response From Prediction Market Operators

Kalshi, one of the prominent prediction market platforms, issued a statement rejecting the AGA numbers and describing them as fake math. Company representatives argued that their contracts differ from traditional sports bets because they focus on binary outcomes tied to verifiable events rather than point spreads or moneylines. They further noted that many of their users trade on non-sports topics such as elections and economic indicators, which they claim reduces any direct comparison to state-regulated sportsbooks.

Other operators in the space have echoed similar points, emphasizing that CFTC-regulated platforms undergo federal review and that their revenue models do not directly compete with state-licensed sports betting products. Observers who reviewed both sides of the discussion point out that the disagreement centers on how much overlap exists between prediction contracts and conventional sports wagers, a distinction that affects whether additional state taxes could apply.

Broader Context of the Revenue Discussion

States that operate regulated sports betting markets have reported steady growth in tax collections since legalization expanded after 2018. The AGA estimate suggests that shifting activity from unregulated platforms back into licensed systems could increase those collections by a measurable amount. Tribes operating casinos under state compacts have also expressed interest in how prediction markets might affect their exclusivity agreements, particularly in regions where sports betting remains limited to tribal facilities.

Public records from the CFTC show that several prediction platforms received approval to list sports-related contracts in recent years, creating the regulatory pathway that Miller criticized. The AGA has previously advocated for stronger coordination between federal and state regulators on products that resemble gambling, and this latest statement continues that pattern of engagement.

Conclusion

The exchange between the American Gaming Association and prediction market operators illustrates ongoing tension over how event contracts are classified and taxed. With the AGA citing more than $1 billion in missed revenue and Kalshi disputing the methodology, the discussion centers on regulatory definitions and revenue allocation. As trading volumes on these platforms continue into the summer of 2026, state and tribal governments will watch for any policy shifts that could redirect funds through established licensing frameworks.