AGA and Indian Gaming Association Tell Congress Sports Betting Prediction Markets Have Cost $1.2 Billion in Tax Revenue
Tribal and commercial gaming leaders testified before a House Agriculture subcommittee that Kalshi and Polymarket sports contracts operate as unregulated sportsbooks, costing states and tribes over $1.2 billion.
The American Gaming Association and the Indian Gaming Association told a House Agriculture subcommittee this week that sports betting offered through prediction markets is inflicting real financial harm on states and tribal communities, citing more than $1.2 billion in lost gaming tax revenue since platforms like Kalshi and Polymarket began listing sports event contracts. The joint testimony came during a two-hour hearing titled “Examining Customer Protections and Market Integrity in Sports Event Prediction Markets,” held before the House Agriculture Subcommittee on Commodity Markets, Digital Assets and Rural Development.
IGA Chair David Bean and AGA Senior Vice President of Government Relations Chris Cylke were the lead witnesses arguing that prediction market sports contracts are functionally identical to regulated sports betting products — moneylines, totals, parlays and player props — without the licensing, taxation or consumer protection requirements that legal sportsbooks must follow.
Tribal Gaming Leaders Say Regulation Is Being Bypassed
Bean told the panel that Indian Country supports legitimate financial innovation but opposes what he described as prediction market operators exploiting a “weak regulatory agency” to offer nationwide online sports gambling to users as young as 18. He pointed to nearly four decades of tribal gaming built under the Indian Gaming Regulatory Act, with strict age verification and problem gambling programs including treatment, self-exclusion and staff training.
“Prediction markets threaten these rural jobs and revenue generated for tribal and state budgets by violating our laws and regulations,” Bean said, adding that the platforms “have invented nothing” beyond replicating existing sportsbook products while sidestepping oversight. He also cited tribal gaming’s broader economic footprint — more than 682,000 jobs in 2025 — and said Congress has not passed any law authorizing what he called nationwide sports gambling through the Commodity Futures Trading Commission.
Bean urged lawmakers to advance legislation barring prediction market operators from offering sports wagering and asked that the Digital Market Clarity Act, a bill dealing with cryptocurrency oversight, not create a back door to sports betting legalization. He noted that more than 40 state attorneys general have already filed legal briefs and comments opposing the CFTC’s current posture on the issue.
AGA Cites Billions in Lost Tax Revenue
Cylke told the committee that sports contracts on platforms like Kalshi and Polymarket “make a mockery of Congressional intent” and strip consumers of protections that licensed sportsbooks are required to provide, including age verification, geofencing, responsible gaming tools and suspicious-activity reporting. He argued the legal gaming industry supports 1.8 million American jobs, contributes roughly $329 billion to the economy, and generates about $53 billion annually in federal, state and local tax revenue — benefits he said exist specifically because the industry is licensed and accountable.
Cylke estimated that states and tribes have lost more than $1.2 billion in gaming tax revenue since prediction markets began offering sports event contracts, calling the figure “snowballing by the day.” He also raised sports integrity concerns, noting that licensed operators monitor betting patterns for suspicious activity in a way prediction markets are not required to replicate.
Much of the hearing’s questioning from committee members focused instead on how to improve CFTC oversight and staffing rather than an outright ban, with several lawmakers directing questions to witnesses who support allowing prediction markets to continue operating under stronger regulatory guardrails. No executives from Kalshi or Polymarket testified at the hearing. The exchange follows a broader year-long legal and legislative fight, including a July 8 federal court ruling that denied Kalshi’s bid to block New York’s gambling enforcement law, with the case still working through further proceedings. Bettors weighing exposure to this fast-moving regulatory fight can compare current markets through the Prediction Markets hub or review platform-specific terms via the Kalshi Review.
What Comes Next
No bill banning sports event contracts had passed either chamber of Congress as of the hearing. Tuesday’s session builds a record that could inform future legislation, but any measure would still need to clear the full House Agriculture Committee, the House floor, the Senate and a presidential signature. In the meantime, state-level enforcement actions against prediction market operators continue to multiply, and the CFTC has maintained it holds exclusive jurisdiction over the event contracts in question. For readers tracking how this fight could reshape where and how sports contracts are offered, the Are Prediction Markets Legal in the US? guide breaks down the current state-by-state landscape.