AGA sees billion-dollar tax gap as states press prediction market fight

Bill Miller did not use the word "winning" at G2E on Monday. He used "throat."

The American Gaming Association president, speaking on the opening panel of the Global Gaming Expo in Las Vegas, told the room that states have gained momentum from recent lower court rulings and that the only way the established gaming industry loses this fight is if it eases pressure on prediction market operators. That is not the language of a coalition that feels secure. It is the language of one that has tasted ground and does not want to give it back.

The AGA's estimate, offered at the conference, is that states have lost more than a billion dollars in tax revenue since prediction markets scaled. That number deserves scrutiny before it gets repeated. The methodology behind it is not on the public record, and a figure assembled by the side with the most to gain from its acceptance should be held loosely. But even discounted, the order of magnitude matters. Legislators who need a number to bring to a budget committee now have one, and it comes with a logo they recognize.

What changed at this year's G2E is the coalition standing behind that number. The Indian Gaming Association joined the AGA on stage — IGA Chair David Bean and Executive Director Jason Giles alongside Miller — and California Nations Indian Gaming Association Chair James Siva made the geography explicit: prediction markets have their strongest user base in California and Texas, two states where tribal operators hold a position they have spent decades and significant political capital defending. Siva's point was not abstract. Tribes are the only licensed operator in California. Anything that draws handle out of that structure without touching a tribal compact is, from their vantage, unlicensed competition.

The CFTC's move this week adds a layer the industry coalition did not have to manufacture. The regulator submitted two proposals to the White House Office of Information and Regulatory Affairs: one to broaden the definition of a swap to include event contracts, and a separate proposal on whether gaming-style products should be excluded from swap treatment entirely. Both drafts arrive after back-to-back circuit court defeats for prediction market operators. The sequencing is not accidental. A regulator that lost in court is now trying to win through rulemaking, which is a slower road but a more durable one if it holds.

The conventional read is that the CFTC is playing catch-up — reactive, wounded, working to reassert authority it failed to defend in litigation. I don't think that's where this lands. Rulemaking that reaches the White House review stage signals institutional commitment, not improvisation. The definitions being contested here — what is a swap, what is a gaming product — are foundational. If those definitions shift, the legal victories prediction market operators have accumulated in the Sixth Circuit and elsewhere get reargued on new ground. The operators know this. The volume reward programs being wound down, the deposit limits being added: these are firms that have read the direction of travel and are reducing the surface area available for enforcement action.