Bill Miller, president and CEO of the American Gaming Association, said prediction-market platforms are essentially operating as backdoor sports betting services.
This characterization comes as the Commodity Futures Trading Commission (CFTC) develops plans to regulate these markets. The AGA said that the lack of oversight allows these platforms to bypass the legal frameworks governing the gambling industry, creating an uneven playing field for licensed operators.
During an appearance on CNBC’s “Squawk Box” on May 21, Miller said the vast majority of business on these platforms is sports betting [1]. He said the platforms are backdoor betting operations that threaten regulated gaming [2].
Beyond the regulatory conflict, Miller highlighted the financial impact on government coffers. He said that U.S. states have lost $1 billion in tax revenue due to the rise of prediction markets [3]. This loss occurs because these platforms often operate outside the tax structures required of traditional, regulated sportsbooks.
Miller has also brought these concerns to U.S. senators, emphasizing that the activity on these sites is not merely about predicting outcomes—it is a gambling operation in disguise [2]. The AGA is urging lawmakers and the CFTC to curb these operations to protect the integrity of the regulated gaming market.
The debate centers on whether prediction markets provide a unique financial tool for hedging and forecasting, or if they are simply an unregulated loophole for sports gambling. As the CFTC weighs its regulatory approach, the AGA continues to push for a system that ensures all betting activity is taxed and monitored according to state laws [3].
“"The vast majority of their business is sports betting."”
The AGA's push for stricter regulation represents a strategic effort to protect the legal gambling monopoly. By framing prediction markets as unregulated sportsbooks, the AGA is attempting to shift the CFTC's perspective from viewing these platforms as financial instruments to viewing them as gambling entities, which would subject them to more stringent state-level taxation and oversight.
