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States Claim $1B Revenue Loss to Unregulated Prediction Markets

State governments have forfeited more than $1 billion in tax revenue due to the expansion of prediction markets, according to the American Gaming Association. The organization estimates the lost funds would otherwise support community projects and tribal gaming operations. Bill Miller, president and CEO of the American Gaming Association, characterizes prediction markets as unregulated sports betting operating outside traditional gambling frameworks. A jurisdictional dispute has emerged between state regulators and the Commodity Futures Trading Commission, which asserts authority over prediction market contracts as swaps and derivatives. States have sued prediction market platforms, contending they violate state gambling laws. The CFTC has countered by suing states it claims are overstepping regulatory boundaries. Both entities are asserting competing claims over market oversight and taxation authority.