The casino lobby just put a price tag on its problem with prediction markets, and the number is $1 billion.
That is how much the American Gaming Association says states and tribes have missed out on in tax revenue, as platforms like Kalshi, Coinbase, and Robinhood scoop up bets that used to flow through licensed sportsbooks.
AGA CEO Bill Miller took the case to CNBC's Squawk Box Thursday morning, where his pitch was simple: prediction markets are sports betting in a different hat, with the same product, a different rulebook, and a very different tax bill.
That tax bill is the issue, because regulated sportsbooks pay states a cut of every wager but prediction markets do not, since they are not legally classified as gambling.
Miller's group, which lobbies for casino operators, manufacturers, and employees, says the lost revenue would otherwise pay for schools, roads, and public safety.
He also flagged the hit to Native American casino revenue, which funds healthcare, education, and other services in tribal communities across the country.
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States are on the casino lobby's side, and several have sued prediction market platforms saying their sports event contracts are gambling under state law.
The Commodity Futures Trading Commission, which oversees financial swaps and derivatives, has sued the states back, arguing these contracts fall under federal jurisdiction.
President Trump weighed in this week on Truth Social, saying the CFTC should keep its authority over the markets, and the Office of Management and Budget is now reviewing a CFTC proposal that would formalize that.
The Coalition for Prediction Markets, which represents Kalshi, Coinbase, and Robinhood, dismissed the $1 billion estimate on X with two words: "Sources not found."
Kalshi spokesperson Elisabeth Diana went further, calling the figure "fake math from casinos" worried about losing their grip on the market.
She pointed to last year's record $78.7 billion in U.S. gaming revenue as evidence the casino industry is doing just fine.
Diana also said prediction markets are "fairer, safer and less predatory than casinos," and argued the platforms are taking share precisely because customers prefer them.
Investors sided with the prediction markets on Thursday, with Coinbase rising around 4% and Robinhood climbing close to 10%.
The OMB's review is the next domino, and if it lands in the CFTC's favor, prediction markets get federal cover while the state lawsuits get harder to win.
If it does not, every platform offering sports contracts is suddenly back in the line of fire.
For Coinbase and Robinhood, the next OMB ruling matters more than the casino lobby's math, because both stocks now treat prediction market revenue as a growth lever still in early innings.
A $78.7 billion industry just told regulators that a $1 billion shortfall is fake math, and the courts will sort it out.
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