Prediction markets cost US states over $1 billion in lost tax revenue since 2025

The American Gaming Association (AGA) estimates that prediction market platforms have cost U.S. states nearly $1 billion in tax revenue since the start of 2025, with the figure now exceeding $1 billion. The report highlights the growing financial impact of unregulated online betting on political and sports events, which operates outside state tax frameworks. The AGA, a national trade group representing the casino gaming industry, argues that these platforms undermine state-regulated gambling and deprive governments of funds for public services. The estimate covers losses from January 2025 onward, though the exact methodology and breakdown by state were not detailed. The finding comes amid increasing scrutiny of prediction markets like Polymarket and Kalshi, which have surged in popularity following the 2024 U.S. election cycle. Regulators in several states have begun exploring legal action or new legislation to tax or ban such platforms.