How a disputed $1 billion claim became a powerful weapon against prediction markets
The American Gaming Association says prediction markets have diverted more than $1 billion from states and tribes, framing Kalshi and Polymarket as untaxed sports betting by another route. Because these platforms are federally regulated by the CFTC, they can operate nationwide, bypassing state sportsbook licenses, taxes, and tribal compacts. The casino lobby uses the dollar figure to sharpen a jurisdiction fight that has produced mixed court rulings and repeated CFTC support for the platforms. States and tribal gaming interests argue the contracts are gambling and should face the same rules as sportsbooks, citing consumer protections, integrity monitoring, and tax revenue for education and public programs. The industry dispute is intensifying: some major sportsbook operators have left the AGA to pursue the federal route. Congress, state attorneys general, and several states, including Minnesota, are pushing back, while trading volume in prediction markets continues to surge rapidly.
