Prediction Markets Coalition Accuses AGA and States of Coordinated Efforts to Block Event Contracts

The Coalition for Prediction Markets has sent a letter to 20 state auditors and inspectors general alleging troubling evidence of coordination between state gaming regulators and the American Gaming Association. The group claims this activity is designed to hinder the growth of yes/no exchanges and event contracts. As someone who has spent decades observing the evolution of gaming regulation, I see this as another layer in the ongoing tension between established industry players and emerging prediction market operators.

The letter points to specific examples, starting with the Maryland Lottery and Gaming Control Agency. In one instance, the agency sent a letter to the Commodities Futures Trading Commission that was essentially a verbatim copy of a draft provided by the AGA. Using Freedom of Information Act requests, Fox45 Baltimore uncovered this alignment, which the coalition suggests may represent a broader pattern.

John Martin, head of the Maryland Lottery and Gaming Control Agency, is cited in the allegations. The CPM states that in March 2025 he circulated a cease-and-desist order issued by the Nevada Gaming Control Board to Kalshi. Then in April 2025, he distributed materials from the AGA, including a draft letter for the CFTC and a list of commissioners’ email addresses.

Evidence from Maryland and Utah Points to Broader Coordination

The coalition’s letter quotes public records suggesting Maryland Lottery and Gaming may be working in coordination with the AGA, other states, and undisclosed entities. It frames these actions as advancing the private interests represented by the AGA while preventing designated contract markets from offering event contracts.

The group assumes the Maryland documents are one example of a wider and more systemic scheme involving numerous participants. Utah provides what the CPM calls corroboration. At a hearing held on June 25, 2026, counsel for Utah represented to the court that he knew certain facts about Kalshi to be true because the AGA had informed him so.

This admission appears to confirm that the AGA is orchestrating, or at a minimum coordinating, the broader multi-state scheme revealed by the Maryland emails. Tina Cannon, Utah State Auditor, is among the recipients of the CPM letter. Other states that received it include Minnesota, which passed legislation in May banning prediction markets, and Illinois, which implemented a transaction tax on yes/no exchanges. The CFTC is challenging both measures.

Questions of Ethics and Regulatory Neutrality

The CPM argues that when state regulators join forces with a private industry trade association and undisclosed entities, they appear to act not as neutral regulators safeguarding the public but as interested parties using governmental authority to advance a private agenda. This raises clear ethical and legal questions about the boundary between legitimate advocacy and improper influence.

However, trade associations routinely provide member firms with talking points and communication materials. The AGA has consistently opposed prediction markets. It has estimated the industry has sapped $1 billion in tax revenue from state and tribal governments. From my perspective, this figure underscores the financial stakes for established operators and governments that rely on traditional gaming taxes.

The risk here is that heightened scrutiny could slow innovation in event contracts at a time when consumer interest continues to grow. Prediction markets sit at the intersection of sports, media, and data, creating both opportunity and regulatory friction. If coordination claims hold, they could invite formal investigations that delay market clarity for everyone involved.

Implications for Operators and the Path Ahead

For gaming executives and client-partners navigating this landscape, the allegations highlight how regulatory pushback can shape competitive dynamics. Sportsbooks aligned with the AGA may benefit from slower prediction market expansion, while pure-play operators like Kalshi face repeated legal and administrative hurdles.

The coalition itself was formed last December by Crypto.com and Kalshi. Its other members are Coinbase Global, Robinhood Markets, and Underdog. This lineup brings significant financial and technological resources to the fight, suggesting the dispute will not fade quickly.

An inflection point is approaching as courts and federal regulators sort through these overlapping claims. States seeking to protect existing tax streams must balance that goal against the potential for prediction markets to expand the overall gaming pie.

The Bottom Line

This letter from the Coalition for Prediction Markets puts the spotlight on how industry trade groups and state regulators interact when new verticals challenge established models. The specific Maryland and Utah examples offer concrete points for review, even as the AGA maintains its long-standing position on tax revenue impacts. Operators should monitor the CFTC’s responses and any resulting audits closely. Greater transparency in these exchanges would serve the public interest and help the entire sector move forward with clearer rules rather than continued uncertainty. Industry participants seeking strategic guidance on sportsbook-prediction market integration can review our advisory resources at https://sccgmanagement.com/our-services/.