The American Gaming Association’s Q1 2026 Gaming Industry Outlook, released on May 7, showed the strongest executive sentiment since Q3 2022, with a 21.4% net positive outlook across major business indicators. The survey, conducted by Oxford Economics between March 23 and April 8, covered 26 senior gaming executives. Yet one figure stood above the rest: 81% of respondents said prediction markets offering sports event contracts pose a “very significant” risk to the regulated gaming industry.
Strong operating data, sharp divide over prediction markets
AGA said its Gaming Conditions Index, which combines revenue, employment, wages, executive sentiment, and casino hotel event activity, rose 1.5% year over year. More than 60% of executives expect higher revenue, stronger balance sheets, and increased capital investment over the next 6 to 12 months. Those readings suggest confidence. The tone changes quickly once prediction markets enter the discussion.
AGA president and CEO Bill Miller described prediction markets as an encroachment on legal operators regulated by states and tribal authorities, and he characterized sports event contracts as a form of illegal sports betting that the industry intends to keep challenging. That position matches the group’s earlier stance toward platforms such as Kalshi and Polymarket. What has changed is the association’s own membership base.
DraftKings, FanDuel, Fanatics, and bet365 all left the group
The break started on November 18, 2025, when DraftKings and FanDuel said in separate statements that they had given up their AGA memberships because they disagreed with the trade group’s position on prediction markets. Both companies had already outlined prediction-market plans during their Q3 2025 earnings calls. DraftKings moved through its Railbird acquisition, while FanDuel pursued a Commodity Futures Trading Commission-regulated arrangement with CME Group.
Those products are now live. DraftKings Predictions launched on December 19, 2025 across 38 states, while FanDuel Predicts went live three days later in five states with a phased national rollout. Three weeks later, Fanatics Betting and Gaming also confirmed its exit, again pointing to disagreement over prediction markets after the December 3 launch of Fanatics Markets. In March 2026, bet365 left as well, though it said the reason was AGA’s focus on the retail casino business rather than a dispute over prediction markets.
The structural effect is clear. By the second half of 2026, AGA no longer has any purely online operator in its membership. The Sports Betting Alliance now carries much of the lobbying weight for the biggest online sportsbooks in the country, and its president and CEO, Joe Maloney, previously served as AGA’s senior vice president of strategic communications.
Federal lobbying fight intensifies before a Senate hearing
Washington’s lobbying map is getting more crowded. CNBC, citing OpenSecrets data, reported that Kalshi spent $615,000 on federal lobbying in 2025, while Polymarket spent $360,000. Last winter, Kalshi helped launch the Coalition for Prediction Markets, whose members now include Coinbase, Crypto.com, Robinhood, and Underdog. Sportico reported that the coalition expects to spend millions of dollars in 2026 defending the CFTC-regulated structure for prediction markets.
The next major test arrives on May 20, when the Senate Commerce Subcommittee on Consumer Protection, Technology, and Data Privacy holds its first hearing focused directly on prediction markets and their overlap with sports wagering. Confirmed witnesses at the time of writing included 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.
Subcommittee chair Marsha Blackburn has said she intends to deliver a recommendation framework before the August recess. Several bills are already in motion, including the Event Contract Enforcement Act, the Prediction Markets are Gambling Act, and the Prediction Markets Security and Integrity Act of 2026. In late April, senators also voted unanimously to bar themselves and their staff from participating in prediction markets.