AGA says states lost $1 billion in gambling tax revenue to prediction markets
The American Gaming Association argues that states have lost more than $1 billion in gambling tax revenue to prediction market platforms that structure event contracts to avoid state gaming taxes. The trade group, which represents the commercial casino industry, says sports-related event contracts drive the bulk of prediction market activity and that platforms' self-description as financial investing tools rings hollow. Kalshi disputed the claim, calling the AGA's tax loss tracker 'fake math' and citing record U.S. gaming revenue as evidence its operations are not harming traditional gaming. The dispute comes as states push harder against platforms offering sports event contracts and amid ongoing litigation over their regulatory status.
The casino lobby's tax framing arms state attorneys general in Rhode Island, Minnesota, and Nevada with a fiscal damages argument alongside their existing enforcement actions. Any state law adopting the AGA's classification would force Kalshi and Polymarket to remit gaming taxes retroactively or face geofencing orders.
The AGA's tax-loss attack extends the casino industry's multi-front pressure on prediction markets already facing state enforcement in Rhode Island, Minnesota, Nevada, and Washington, joining the tribal and federal regulatory pile-on.