AGA Mobilizes Against Prediction Markets After Actions in 16 States and $1 Billion Revenue Loss

The American Gaming Association is intensifying its stand against prediction markets offering sports-related contracts. The group warns these platforms now sit at the center of a wider fight over illegal betting in the United States.

Gambling operates under state-by-state licensing while prediction markets fall under nationwide CFTC oversight. This creates a threat to state gambling rules and an unfair advantage over licensed betting firms according to the AGA. Its “State of the States 2026” report details the scale of the response.

Enforcement Actions Taken in 16 States

Regulators tribal governments and local law enforcement acted against sports event contracts in 16 states during 2025. The steps included cease-and-desist orders lawsuits and formal opinions that declared the products unlicensed sports wagering.

The AGA places prediction markets in the same category as sweepstakes casinos offshore sportsbooks and skill games within the illegal gaming market. This follows aggressive steps taken against sweepstakes platforms the previous year.

Five states passed laws in 2025 that explicitly banned sweepstakes gaming platforms mimicking online casinos or sportsbooks. Those states were California Connecticut Montana New Jersey and New York. Arizona and Louisiana pursued enforcement under existing law.

Lessons From the Sweepstakes Crackdown

Bill Miller AGA President and Chief Executive highlighted the results. “We confronted the illegal gaming market on multiple fronts” Miller wrote in the report’s opening message. “Working alongside state and tribal regulators attorneys general and law enforcement we successfully stopped the advance of sweepstakes casinos and saw them pushed out of many key markets.”

Added Miller: “[We] have mobilized the industry and our partners to address the growing threat of prediction markets offering sports betting outside of established state and tribal gaming law.”

The AGA argues the issue reaches beyond competition. The dispute goes to the heart of the American gaming framework where consumer protections responsible gaming standards and fair tax revenue distribution all rely on a clear state-regulated system.

The $1 Billion Revenue Threshold

Sports event contracts have now crossed a $1 billion threshold in lost state and tribal revenue. The AGA views this as a turning point with funds diverted through what it calls backdoor sports betting markets operating outside state and tribal gambling law.

That revenue would otherwise support education infrastructure public safety responsible gambling programs and other local services. Miller put the stakes in clear terms. “It’s not about the AGA or the gaming industry it’s about states and tribes that are losing literally US$1 billion in state and tribal revenue that would otherwise go to fund important community projects and pay taxes to these states.”

Where the Risk Lies

From the supplier side this coordinated industry response is the type that shifts commercial priorities fast. In my experience across regulated markets once revenue losses hit this scale enforcement momentum builds quickly.

The risk for prediction market platforms lies in the growing alignment between state regulators tribal authorities and law enforcement. What worked to contain sweepstakes could extend here even with CFTC authorization creating uncertainty for any operator weighing exposure to event contracts.

This development leaves gaming operators and tech partners with clear signals to watch. Further state-level actions could tighten the operating environment and force sharper decisions on product compliance and market access.

Reporting: The Gathering Storm: AGA Building Opposition To Threat of Prediction Markets (igamingfuture.com)