The American Gaming Association has warned that prediction markets are diverting sports betting activity away from regulated sportsbooks. It forecasts $29.5bn in legal NFL bets, only slightly above the $29.4bn recorded last year.
They claim the lack of impactful growth comes despite expansion of regulated sports betting across the US, pointing to prediction markets on sports events as direct competitors.
Also, the AGA estimates that more than $1.3bn in potential state gaming tax revenue has shifted to prediction markets since 2025. It estimates that around $5.1bn of Kalshi’s trading volume has come from users aged 18 to 20, who cannot access regulated US sportsbooks.
Research shows prediction markets gaining traction with NFL bettors
Its survey of 926 US NFL bettors found that 84% were aware of prediction markets, while 60% planned to trade, buy or sell event contracts during the year during the coming NFL season. The findings come ahead of the 2026 NFL season, which begins with the Seattle Seahawks hosting the New England Patriots on 9 September.
AGA President and CEO Bill Miller said: “We’re excited for the NFL season to kick-off, as are millions of fans eager to engage with their favourite teams. Since the Supreme Court struck down the federal sports betting ban in 2018, legalised sports betting had seen tremendous growth.
“But this year is different. Since the widespread launch of backdoor sports betting on so-called ‘prediction markets,’ the growth of legal handle has stalled.”
AGA warns consumers may struggle to distinguish products
Miller described prediction markets as “backdoor sports betting” and said their marketing risks confusing consumers about the difference between financial products and regulated gambling.
“Kalshi and other prediction markets say they don’t need to follow state- and tribal- regulated sports betting laws or pay state gaming taxes. Their defiance means consumers, including teenagers and students, placing bets without the protections, oversight, and accountability that the legal market provides,” He added.
The AGA argues prediction platforms can compete for the same sports audience while operating outside licensing, taxation and player-protection systems applied to sportsbooks.
AGA’s concern shows prediction markets are no longer a side issue for regulated sportsbooks, with younger users contributing billions in trading volume. The bigger debate will focus on whether sports event contracts can keep operating outside state betting frameworks while competing for the same customers and attention as sportsbooks.
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