Prediction Markets Cost States $1 Billion
Unregulated prediction markets cost U.S. states & tribes $1B annually in lost gaming tax revenue, per the American Gaming Association.
Mehmet Şahinoğlu ·
Prediction Markets Cost States $1 Billion
The American Gaming Association (AGA) reported on Thursday that unregulated prediction markets are responsible for an estimated $1 billion in lost gaming tax revenue for U.S. states and tribal nations annually. This financial impact stems from the operation of prediction markets, which do not contribute tax revenue to states in the same manner as regulated sports betting operators.
The AGA highlighted that 41 state attorneys general have expressed concerns regarding the regulatory oversight of these markets. These officials contend that the Commodity Futures Trading Commission (CFTC), while significant to economy, is not the appropriate regulator for sports betting activities. The AGA asserts that this regulatory ambiguity allows prediction markets to operate without the tax obligations imposed on licensed sportsbooks.
The estimated $1 billion in foregone revenue would otherwise be available to states and tribal governments for funding community projects and other public services. This situation underscores an ongoing dispute between the regulated sports betting industry and prediction market platforms over market classification and taxation.