AGA says states lose $1bn in tax revenue because of prediction markets

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The American Gaming Association’s (AGA) anti-prediction markets streak is not exactly new. The trade group, representing the interests of the gambling industry in the United States, has been a vociferous critic of the advance of sports event contracts and the companies that provide them, in what the association claimed has been a breach of local gaming laws.

AGA insists prediction markets are already preying on tax revenue

To put things in perspective, AGA has now calculated that because of prediction markets, states may be losing as much as $1bn in tax revenue every year, a figure that may widen as time goes on and the regulatory status of the vertical is not settled. AGA made the statement via email on Thursday, shared with media outlets, in which it included a quote from trade group President & CEO Bill Miller, who had previously spoken on CNBC Squawk Box. We recently had 41 attorneys general from around the country weighing in, saying the CFTC plays an important role in the nation’s economy, but they’re not the regulator of national sportsbooks, Miller told the show. Forty-one 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, he reminded. AGA did not venture to flesh out more details about this tax loss, but the trade group remainsfirm in its opposition against the sector, even though some of its core members, among which are DraftKings and FanDuel, quit over the internal rift that ensued from opposite prediction market stances.

Litigation is ongoing as prediction markets, the CFTC, and the states clash

Things have been growing tense in the space. The Commodity Futures Trading Commission (CFTC), the de facto sector regulator, has launched a litany of lawsuits against individual governors, attorneys general, and states, arguing that they were attempting to preempt federal regulation. Most recently, the CFTC sued Minnesota over Gov. Tim Walz’s decision to sign a law that criminalizes prediction markets - the country’s first. Rhode Island is similarly seeking to outlaw the sector, with a new complaint filed against it. While AGA has repeatedly criticized the prediction market space, President Donald Trump took to his social media platform, Truth Social, this week to lambast critics of the sector and equate them to SCUM in what continues to be an intense tug-of-war between stakeholders.