81% of Gaming Execs Say Prediction Markets Are an Existential Threat — But the Industry Split Proves It

The American Gaming Association just told us something the industry probably already knows: prediction markets aren’t going away, and the people most worried about them might be the least positioned to stop them. The AGA’s Q1 2026 Gaming Industry Outlook, a biannual survey conducted by Oxford Economics, polled 26 senior gaming executives between March 23 and April 8. The headline grabber: 81% of those executives identified sports event contracts — the backbone of platforms like Kalshi — as a “very significant” threat to the regulated gaming industry. That’s a striking number. But the story behind the number is even more striking.

Who Is Still in the Room?

To understand why the 81% figure matters, you have to look at who actually filled out that survey. In the six months preceding its release, four of the biggest names in US online sports betting walked out of the AGA entirely. DraftKings and FanDuel quit on November 18, 2025, citing a clear misalignment with the AGA’s hardline stance on prediction markets. Both companies had already telegraphed their intentions on Q3 2025 earnings calls — DraftKings through its Railbird acquisition and FanDuel through a CFTC-regulated partnership with CME Group. Three weeks later, Fanatics Betting and Gaming followed, exiting shortly after launching its own Fanatics Markets product on December 3. Then in March 2026, bet365 also departed, citing the AGA’s focus on the retail casino business as out of step with its digital-first priorities.

The structural result is significant: the AGA now has no purely online operator among its members. The executives surveyed in that Q1 2026 outlook are, by definition, those who stayed — largely representing brick-and-mortar casinos, gaming suppliers, and tribal operators. When you look at it that way, the 81% threat figure isn’t really surprising. Of course the remaining membership views prediction markets as an existential threat. Those are exactly the companies that don’t want to compete with them.

Meanwhile, the Operators Who Left Are Moving Fast

DraftKings Predictions launched on December 19, 2025, rolling out across 38 states, including major markets like California, Texas, and Florida that still don’t permit state-licensed mobile sportsbooks. DraftKings Predictions offers sports event contracts in 17 of those states, meaning the company is effectively doing sports betting business in markets it has never been able to reach through traditional channels.

FanDuel Predicts promo launched three days later, on December 22, initially in five states, before expanding to full national availability in 2026. Sports outcome contracts are available in 18 states, while financial and economic markets — covering things like S&P 500 movements, oil prices, and GDP readings — are accessible nationwide. FanDuel Predicts is built on the company’s CME Group partnership, which gives it institutional credibility in the CFTC-regulated framework. Fanatics Markets entered the space even earlier, going live on December 3 before Fanatics officially confirmed its AGA exit.

All of this is happening in a market that was shaped by Kalshi before any of these operators arrived. Kalshi grew from 600,000 active monthly users at the start of 2025 to 5.1 million by early 2026, according to Sensor Tower data cited by the Financial Times. A Bank of America report published in April 2026 found Kalshi controlling approximately 89% of measured US prediction market volume. The platform’s 2025 notional trading volume hit $23.8 billion, representing more than 1,100% year-over-year growth. Sports contracts have been the engine of that growth, accounting for roughly 68-75% of Kalshi’s total trading activity. For anyone who wants a closer look at how the platform operates, our Kalshi review breaks it down in full.

A Lobbying Realignment That Says Everything

Perhaps the most telling detail from the past six months isn’t a product launch or a survey stat — it’s a job move. When the Sports Betting Alliance announced its new president and CEO in December 2025, it hired Joe Maloney, who had been the AGA’s senior vice president of strategic communications. The organization that now carries the lobbying weight for DraftKings, FanDuel, Fanatics, BetMGM, and bet365 is being led by someone who came directly from the AGA’s own communications team.

The SBA’s membership represents a coalition that doesn’t fully agree on prediction markets internally — BetMGM has publicly opposed them, and bet365 has not staked out a firm position — but the broader signal is clear. The largest online operators in the country have coalesced around a separate trade group, and that group now sits on the opposite side of the federal lobbying table from the AGA on the prediction markets question.

The AGA president and CEO Bill Miller has not been quiet about where the association stands. In a December membership letter, he wrote: “Our position is clear and unwavering: sports event contracts are gambling, and gambling is regulated by states and tribes.” In his statement accompanying the Q1 2026 Outlook, he described prediction markets as “increasingly encroaching on legal, state-and tribal-regulated operators.” The language is firm. But the companies that have decided to compete in prediction markets aren’t listening to it — they’re too busy building products.

What This Actually Tells You

The 81% threat figure from the AGA’s Q1 2026 Outlook is real, and the concern it reflects is legitimate. Prediction markets operate under CFTC oversight rather than state gaming commissions, they’re available in states where traditional sportsbooks cannot operate, and they’ve attracted tens of millions of users in a short period of time. The AGA’s remaining members — many of them heavily invested in physical gaming infrastructure and state licensing — have genuine reasons to view that as a threat to their model.

But the companies that left the AGA over this exact issue are the same companies dominating US online betting. DraftKings and FanDuel didn’t walk away from a trade group on a whim. They walked away because they had already made their bets, and those bets are on prediction markets. The survey tells you what the industry’s old guard thinks. The product launches tell you where the money is actually going.