Casinos Deploy $1B "Loss" Claim as Weapon Against Prediction Markets

The American Gaming Association put a number on its grievance against prediction markets this week, and it's a deliberate one. A counter on the AGA's website crossed $1 billion on Thursday – money the trade group says states and tribes have lost in tax revenue to platforms like Kalshi and Polymarket. AGA President Bill Miller took the figure to CNBC to argue those funds would otherwise support education, pensions, and responsible-gaming programs.

The dollar amount is a deliberate rhetorical move. For over a year, state officials have been tangled in court fights and regulatory skirmishes with prediction market operators, arguing that outcome-trading contracts are really just sports gambling under a different name. They've lost most of those battles. The CFTC has sided with the platforms in every case, and courts have split on jurisdiction. A tangible loss figure sidesteps all that legal noise. Governors and attorneys general can now point at a number and tell voters where the money went.

Prediction markets operate under federal CFTC oversight, which has allowed them to function in all 50 states – including jurisdictions where traditional sportsbooks face heavy restriction or complete prohibition. That regulatory arbitrage is what fuels the state complaint. These platforms handle real money on real-world outcomes: who wins the game, election results, economic data releases. Trading volume has surged as retail participation has grown, and a growing portion of that activity looks and feels like straightforward sports wagering.

The numbers warrant skepticism, though. Kalshi dismissed the AGA estimate as "fake math from casinos" defending monopoly margins, while the Coalition for Prediction Markets said the underlying methodology was opaque and sources could not be verified. The 2025 calendar year closed with $78.72 billion in total US gambling revenue and a record $18.09 billion in gaming taxes – the best year the legal gambling industry has ever seen. A sector claiming it's being robbed while posting record profit is an awkward position from which to lobby Congress.

The AGA's political instinct is sound regardless of the math. Regulatory fights turn on jurisdiction and principle until they turn on money. The CFTC and courts have proven unmoved by state arguments that these are gaming contracts. But lawmakers facing constituent anger over allegedly missing education funding may prove more persuadable. Watch for state legislative pushes this summer and fall to assert direct regulatory authority over prediction markets, or for federal legislation that clarifies the boundary between outcome derivatives and gambling once and for all.