AGA Says States Lost $1 Billion to Prediction Markets as CFTC Defends Federal Oversight
Updated
Updated · CNBC · May 28
AGA Says States Lost $1 Billion to Prediction Markets as CFTC Defends Federal Oversight
9 articles · Updated · CNBC · May 28
$1 billion in missed state and tribal tax revenue is now tied to unregulated prediction markets, the American Gaming Association said, arguing communities and Native American casinos are losing funds that regulated gambling would generate.
Bill Miller, the group's CEO, called the platforms "backdoor sports betting," saying their sports-event contracts function like sportsbooks but avoid state gambling rules and taxes.
That dispute has hardened into a jurisdiction fight: states have sued several platforms under local gambling laws, while the CFTC has sued states it says are encroaching on federal authority over swaps and derivatives.
Trump said this week that the CFTC's jurisdiction over prediction markets should be preserved, and the Office of Management and Budget is reviewing a proposal for the agency to regulate the sector.
Prediction-market companies say their contracts have economic utility beyond gaming, but the AGA argues sports-related contracts make up most trading volume, strengthening calls for gambling-style oversight.
Will the Supreme Court ultimately define sports betting as a federally-regulated financial product?
As courts split, who will win the trillion-dollar war to regulate online prediction markets?