Key Points The American Gaming Association (AGA) estimates that states have lost over $1 billion in tax revenue due to the rise of prediction markets. AGA President and CEO Bill Miller argues that the Commodity Futures Trading Commission (CFTC) has inadequately regulated such platforms. Former U.S. President Donald Trump stated on Truth Social that CFTC jurisdiction over prediction markets should be maintained. According to the AGA CEO, the vast majority of prediction market activity constitutes sports betting. The American Gaming Association (AGA) currently estimates that states have missed out on more than $1 billion in tax revenue because of the growth of prediction markets. Association President and CEO Bill Miller detailed this estimate in an interview with CNBC's "Squawk Box." He explained that states tax legal gambling activities, and this significant loss of revenue has tangible impacts on local communities. "Today, states and tribes are losing a real $1 billion in revenue that could fund important community projects," he said, noting that this also affects revenue for tribal casinos. Miller's organization represents casino operators, equipment manufacturers, and industry employees. He stated directly that prediction markets are essentially "sports betting by another name," with the only difference being they are not subject to the regulatory framework of licensed sports betting. State governments share a similar view, considering sports event contracts on prediction markets to be gambling and subject to state-level regulation. However, the Commodity Futures Trading Commission (CFTC) maintains that such contracts fall under its regulatory purview, classifying them as swaps and derivatives. Some states have filed lawsuits against multiple prediction market platforms, alleging violations of state law. Conversely, the CFTC has sued these states, claiming they are infringing on federal regulatory authority. "We agree the CFTC plays an important role in financial markets like commodities and precious metals," Miller said. "What we object to is the CFTC allowing these prediction markets to operate what is essentially a nationwide sportsbook with almost no regulation." Former U.S. President Donald Trump stated on Truth Social that preserving CFTC jurisdiction over prediction markets is crucial. The Office of Management and Budget is also reviewing a proposal to authorize CFTC oversight of prediction markets. Prediction market platforms argue they are not equivalent to sports betting. These companies claim they serve an economic purpose—for instance, offering contracts related to macroeconomic events or political elections—and are not merely gambling tools. However, Miller contends that the fact the vast majority of trading volume on prediction markets comes from sports event contracts directly contradicts these claims. "These companies package themselves as financial investment tools, but the reality is, the vast majority of their business is sports betting," he said.
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