The American Gaming Association is putting sports-related prediction markets in the same camp as sweepstakes casinos, offshore sportsbooks and skill games in its State of the States 2026 report. It says regulators, tribal governments and law enforcement acted against sports event contracts in 16 states during 2025.
The association says that response was broad, ranging from cease-and-desist orders to lawsuits and formal opinions that classified the products as unlicensed sports wagering. In the report’s opening message, AGA chief executive Bill Miller said the group had confronted the illegal gaming market on multiple fronts.
Miller said the AGA worked with state and tribal regulators, attorneys general and law enforcement to stop the advance of sweepstakes casinos and push them out of many key markets. He added that the group had mobilised partners to address the growing threat of prediction markets offering sports betting outside established state and tribal gaming law.
The report argues that prediction markets could follow the same path as sweepstakes casinos. It says five states, California, Connecticut, Montana, New Jersey and New York, passed laws in 2025 explicitly banning sweepstakes gaming platforms that mimic online casinos or sportsbooks, while Arizona and Louisiana used existing law to take enforcement action.
The AGA says the dispute goes to the heart of the American gaming framework because consumer protections, responsible gaming standards and tax distribution depend on a clear state-regulated system. It also says gambling is licensed state by state, while prediction markets can operate nationwide because trading regulators oversee them at the federal level.
The trade group says sports event contracts have crossed a $1 billion threshold in lost state and tribal revenue. It says that money would otherwise support education, infrastructure, public safety, responsible gambling programmes and other local services funded by legal betting.
On the AGA’s State of the States 2026 page, the broader commercial gaming industry posted record revenue of $78.62 billion in 2025, up 9.1% from 2024. The association said 34 of 38 states, plus Washington, D.C., set annual records, and direct gaming tax revenue rose to $17.86 billion.
Commercial sports betting revenue reached $16.89 billion in 2025, while internet gaming across the seven states with lawful online casinos climbed to a record $10.73 billion. Pennsylvania remained the largest iGaming market at $3.46 billion, and annual iGaming revenue surpassed commercial land-based casinos there and in New Jersey for the first time.
The pushback is not one-sided. CNBC reported that prediction market platforms say they are not equivalent to sports betting and point to contracts tied to macroeconomic events and politics, while Kalshi spokesperson Elisabeth Diana called the AGA’s estimates “fake math.” Miller, meanwhile, said the Commodity Futures Trading Commission was enabling prediction markets to operate national sportsbooks with very little to no regulatory oversight, a charge the agency disputes.
Stateline reported that the conflict has already led to litigation between platforms and states in at least eight states, and that officials in 11 states have sent cease-and-desist orders to prediction market companies, according to the AGA. The National Conference of State Legislatures has urged Congress to act swiftly to address the rapid growth of unregulated sports-related event contracts.
