Gambling’s Great Schism: AGA’s Lonely War on Prediction Markets

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Ah, the American Gaming Association, that venerable institution, has released its Q1 2026 Gaming Industry Outlook, a document as weighty as a Chekhovian sigh. Conducted by Oxford Economics, this biannual survey of 26 senior gaming executives (between March 23 and April 8, no less) paints a picture of confidence, yet beneath the surface, one detects the faint odor of panic-the kind that arises when prediction markets, those mischievous upstarts, threaten to upend the cart of tradition.

  • Key Takeaways:

  • AGA Q1 2026 outlook: 81% of gaming executives flag prediction markets as a “very significant” threat-a specter haunting their spreadsheets.
  • Four major operators fled the AGA in six months: Draftkings, Fanduel, Fanatics, and bet365-like rats leaving a sinking ship, or perhaps, simply seeking greener pastures.
  • Senate Commerce subcommittee opens its first prediction-markets hearing on May 20-a date that will live in infamy, or at least in the footnotes of regulatory history.

A Lobbying Landscape as Fractured as a Chekhov Family Dinner

The AGA survey proclaims that executive sentiment has reached its zenith since the third quarter of 2022, with a 21.4% net positive outlook across key business indicators. The Gaming Conditions Index-a composite of revenue, employment, wages, executive sentiment, and casino hotel event activity-has risen 1.5% year-over-year. Over 60% of executives predict higher revenues, stronger balance sheets, and increased capital investment in the next 6-12 months. Yet, one wonders, is this optimism merely the calm before the storm?

Alas, the mood darkens when the conversation turns to prediction markets. A staggering 81% of respondents view these markets as a “very significant” risk to the regulated gaming industry. AGA president and CEO Bill Miller, with the gravitas of a man defending a crumbling fortress, decries prediction markets as an encroachment on legal, state-regulated, and tribal-regulated operators. He characterizes sports event contracts as a form of illegal sports betting, a menace to be contested with all the fervor of a man tilting at windmills.

This stance is consistent with the AGA’s previous battles against the likes of Kalshi and Polymarket. Yet, the association’s membership-and thus its lobbying clout-has dwindled like a Chekhovian estate, fading into obscurity. The exodus began on November 18, 2025, when Draftkings and Fanduel announced their departure, citing misalignment with the AGA’s stance on prediction markets. Both had unveiled prediction-market plans during their Q3 2025 earnings calls-Draftkings through its Railbird acquisition and Fanduel via a CFTC-regulated partnership with CME Group. Their products are now live: Draftkings Predictions launched on December 19, 2025, across 38 states, while Fanduel Predicts debuted three days later in five states, with a phased national rollout.

Three weeks later, Fanatics Betting and Gaming followed suit, citing the same reason-a difference of opinion on prediction markets following the December 3 launch of its Fanatics Markets product. The same week, the Sports Betting Alliance announced that Joe Maloney, the AGA’s senior vice president of strategic communications, would lead the SBA as president and CEO. This crossover crystallized the uneasy relationship between the two trade groups.

The SBA, representing five online operators-three of which offer prediction-market products, one (BetMGM) that opposes them, and one (bet365) that remains undecided-does not take a unified position on the vertical. The two groups now stand on opposite sides of the federal lobbying calculus, like estranged siblings at a family gathering. The AGA enters the latter half of 2026 without a single purely online operator in its membership, while the SBA, led by a former AGA executive, now wields the lobbying power of the country’s largest online sportsbooks.

Not all departures were due to prediction-market disputes. Notably, bet365 cited the AGA’s focus on the retail casino industry as the reason for its March exit. An AGA spokesperson dismissed this as “not a new development,” declining to specify timing-a response as vague as a Chekhovian subplot.

The lobbying landscape is now more crowded than a Moscow train station. Kalshi spent $615,000 on federal lobbying in 2025, according to OpenSecrets data cited by CNBC, while Polymarket spent $360,000. Last winter, Kalshi helped launch the Coalition for Prediction Markets, a trade group whose membership includes Coinbase, Crypto.com, Robinhood, and Underdog. Per Sportico, the coalition plans to spend millions in 2026 defending the CFTC-regulated framework for prediction markets. Both Kalshi and Polymarket count Donald Trump Jr. as an advisor-a detail as absurd as a Chekhovian farce.

The next federal pressure point arrives on May 20, when the Senate Commerce Subcommittee on Consumer Protection, Technology, and Data Privacy convenes its first hearing on prediction markets and their intersection with sports wagering. AGA president Bill Miller, Tennessee Sports Wagering Council executive director Mary Beth Thomas, Integrity Compliance 360 co-founder and CEO Scott Sadin, and former House Financial Services Committee chairman Patrick McHenry, now a senior advisor at the Coalition for Prediction Markets, are the confirmed witnesses. Subcommittee chair Marsha Blackburn intends to deliver a recommendation framework before the August recess, with the Senate Commerce and Banking Committees expected to reconcile competing approaches before the 2026 midterms consume the legislative calendar.

Several legislative vehicles are already in motion: the Event Contract Enforcement Act and the Prediction Markets are Gambling Act would restrict sports-related contracts on federally regulated exchanges, while the Prediction Markets Security and Integrity Act of 2026 is also under consideration. In late April, senators unanimously voted to ban themselves and their staff from participating in prediction markets-a move as symbolic as a Chekhovian gesture.

The May 20 hearing will mark the first test of the realigned lobbying ecosystem before a Senate body-and the first time the AGA argues its position without the country’s largest online sportsbooks at the table. One can only imagine the drama, the tension, the unspoken resentments-a scene worthy of Chekhov himself.

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2026-05-09 12:31