AGA Survey Reveals Gaming Leaders Fear Prediction Markets

(AsiaGameHub) –   The US gaming industry anticipates continued growth in the coming year, but prediction markets have emerged as a major source of concern for executives.

---

Key Insights

• Over 60% of surveyed executives anticipate increased revenue and improved financial positions.
• A significant 81% identified prediction markets as a very serious threat.
• The AGA survey included responses from 26 senior leaders representing gaming companies, suppliers, and operators.

---

Prediction Markets Cast Shadow Over Positive Gaming Outlook

Gaming executives are expressing greater confidence than they have in recent quarters, yet sports event contracts now rank among the top risks for the regulated betting sector.

The American Gaming Association reported Thursday that its latest Gaming Industry Outlook reflects the most optimistic sentiment since Q3 2023. More than 60% of surveyed senior executives expect revenue growth, stronger balance sheets, and higher capital expenditures over the next 12 months.

This optimism persists despite ongoing inflation, elevated gas prices, trade policy uncertainties, geopolitical tensions, and the conflict with Iran. Economic indicators also show improvement—the AGA noted that the Gaming Conditions Index grew by 1.5% year-over-year in Q1 2026 and expanded across two consecutive quarters.

AGA president and CEO Bill Miller stated:

“The legal state- and tribal-regulated gaming industry continues to demonstrate resilience and adaptability amid a dynamic economic landscape. Operators remain focused on investing in innovation and delivering world-class entertainment, while navigating an evolving competitive and regulatory environment.”

However, prediction markets have significantly altered the tone of this outlook. Platforms such as Kalshi and Polymarket now offer sports event contracts in numerous U.S. states, including markets that closely resemble traditional sportsbook offerings. These platforms cover spreads, totals, and moneyline-style outcomes across the NFL, NBA, MLB, NHL, NCAA, and other major leagues.

This expansion has raised alarms among regulated gaming leaders. According to the AGA, 81% of surveyed executives classified prediction markets as a very serious threat. Miller added:

“Illegal sports betting via sports event contracts is increasingly undermining legal, state- and tribal-regulated operations. It is clear that the legal, regulated sector views this as a serious threat and will continue to take action to defend the integrity of our industry.”

The core issue lies in regulatory divergence. Prediction markets operate under federal oversight by the Commodity Futures Trading Commission (CFTC), whereas sports betting and iGaming require state or tribal authorization. This federal framework has enabled event contract platforms to operate in states where online sports betting remains prohibited.

Tribal gaming authorities have already voiced opposition, and more than a dozen states are currently engaged in legal disputes involving these trading exchanges. Meanwhile, FanDuel, DraftKings, and Fanatics withdrew from the AGA after opting to develop their own prediction market products. These companies refrain from offering event contracts—also known as swaps—in jurisdictions where they already conduct legal sportsbooks.

Among current AGA members are sports betting operators that have chosen not to enter the prediction market space, including Caesars, MGM Resorts, Rush Street Interactive, and PENN Entertainment.

Executives also highlighted mounting pressure from conventional cost factors. Conducted between March 23 and April 8, the survey found that 54% cited employee wages as the primary expense challenge, followed by tax and regulatory policy concerns. Additionally, competition from emerging gaming formats gained traction as a worry, with 42% of respondents flagging it—a substantial increase from 25% in Q3 2025.