American Gaming Association estimates that over $1bn in tax revenue has been lost to prediction markets

States and tribes that are losing literally $1bn in state and tribal revenue that would otherwise go to fund important community projects and pay taxes to these states

The American Gaming Association has issued a memo, estimating that US states have missed out on $1bn in tax revenues due to the growing popularity of prediction markets.

The AGA said: “These are real dollars being siphoned away from states, tribes, and local communities through backdoor sports betting markets operating entirely outside of state and tribal law. That revenue would otherwise be funding education, infrastructure, public safety, responsible gaming programs, and essential services for communities around the country — supported by the legal, regulated gaming industry that plays by the rules.”

AGA President & CEO Bill Miller said: “We recently had 41 Attorney Generals from around the country weighing in, saying the CFTC plays an important role in the nation’s economy, but they’re not the regulator of national sportsbooks. 41 attorneys general — that’s from every political stripe that there is in this country. It’s not about the AGA or the gaming industry, it’s about states and tribes that are losing literally $1bn in state and tribal revenue that would otherwise go to fund important community projects and pay taxes to these states.” 

In other news, the Commodity Futures Trading Commission has issued an Order for Approval to KalshiEX, LLC, a designated contract market, for the listing of the BTCPERP Contract, a perpetual contract that references the spot price of bitcoin, as a futures contract. 

After review of the submission and associated materials, the Commission determined that the BTCPERP contract complies with the Commodity Exchange Act and the Commission’s regulations thereunder, including the Core Principles applicable to DCMs under Section 5(d) of the Act and Part 38 of the Commission’s regulations.

The Order requires, among other terms and conditions, that Kalshi list and maintain the BTCPERP Contract in compliance with all applicable provisions of the Commodity Exchange Act and the Commission’s regulations thereunder, as may be amended or adopted. The Order was based on representations and submissions made by Kalshi in support of its request for Commission approval, including its explanation and analysis of the BTCPERP Contract’s terms and conditions, the nature of the underlying commodity market, and the BTCPERP Contract’s compliance with applicable provisions of the Commodity Exchange Act and the Commission’s regulations thereunder, including the Core Principles applicable to DCMs.

The Commission recognizes that the perpetual contract design may not be suitable for all asset classes. With this in mind, and consistent with the Commission’s Policy Statement Concerning the Listing of Perpetual Contracts, the Commission encourages market participants to engage with Commission staff and submit for Commission review and approval any perpetual contract on assets that are not contemplated in the Order pursuant to the voluntary product approval process under Commission Regulation 40.3.