Record commercial and tribal revenue, and a threat the industry calls existential. Both are true. The data cannot yet tell you which one wins.
US commercial gaming hit a record $7.06 billion in May, and tribal gaming set a record $46.2 billion for FY2025, even as the industry warns that prediction markets threaten sportsbooks and tax revenue. However, revenue data cannot yet show whether prediction markets have diverted betting, because the debate is about long-term market structure, not this quarter’s numbers.
- The Record Numbers
- Why the Prediction Markets Fight Escalated Anyway
- Why the Data Can’t Settle It
US regulated gaming is posting record revenue while its trade bodies warn of an existential threat from prediction markets. Both things are happening at once. Commercial gaming hit a record $7.06 billion in May, up 4.6% year-on-year, according to the American Gaming Association. Tribal gaming set its own record of $46.2 billion for FY2025. However, the same industry groups posting those numbers are escalating a fight against sports event contracts. That tension is the story. Record results have not calmed the warnings. As a result, the debate has moved somewhere revenue figures cannot follow: the market’s long-term structure.
The Record Numbers
The growth is broad and real. Commercial gaming reached $34.0 billion across the first five months of 2026, up 6.4% year-on-year. May alone set the $7.06 billion record. Tribal gaming’s $46.2 billion FY2025 total rose 5.3% and marked its highest year ever. Pennsylvania added a striking data point. Combined iGaming and sports betting revenue there passed casino slot and table revenue for the first time. Pennsylvania sports betting revenue jumped 35.9% to $662.90 million, even as total handle dipped slightly. Only two of the state’s 17 commercial casinos saw revenue fall. World Cup demand reinforced the picture. DraftKings called the final the most bet-on soccer match in its history, topping 2 million bets. Tournament bets rose 650% against the 2022 World Cup. GeoComply logged 14.7 million location checks on final day, nearly double the 2022 figure. So consumer demand for regulated betting looks robust, not eroding. However, one soft spot appeared. Sports betting revenue fell 1.8% in May, which the AGA partly blamed on prediction markets. The tribal-gaming detail sits in our report on US tribal gaming’s record year.
Why the Prediction Markets Fight Escalated Anyway
Record numbers did not cool the opposition. The AGA has become one of the sector’s loudest critics. It has urged Congress, courts, and federal regulators to place sports event contracts outside the Commodity Exchange Act. According to the AGA, prediction markets effectively offer nationwide sports betting without state licences, state taxes, or consumer protections. The group launched a public tracker of tax revenue it believes states have lost. As of publication, that estimate exceeds $1.21 billion. However, that figure comes from the industry body lobbying hardest against these platforms. It is an advocacy estimate, not an audited loss. Tribes have joined the fight in force. Multiple tribes and tribal organisations have sued operators such as Kalshi. They argue sports event contracts breach the exclusivity that underpins tribal gaming compacts under IGRA. Enforcement has spread widely. Nevada, New Jersey, Maryland, Washington, Minnesota, New York, and New Mexico have all challenged operators. Congress is examining the sector through hearings and more than two dozen bills. So the pressure is escalating on multiple fronts at once. Trade coverage of the litigation, including AGBrief, tracks the state actions. The enforcement mechanics feature in our report on Ireland’s action against Polymarket and Kalshi.
Why the Data Can’t Settle It
Record revenue does not disprove the threat. That is the analytical heart of it. Revenue reports cannot measure betting that shifted from licensed sportsbooks to federally regulated event contracts. They also cannot show how much faster regulated markets might have grown without prediction markets. So the absence of a decline is not proof of no impact. Several other forces muddy the picture too. The post-PASPA wave of new state launches has slowed, leaving fewer fresh markets to fuel growth. Sportsbook hold swings independently of handle, so revenue can fall even when wagering rises. As a result, May’s 1.8% sports betting dip has several plausible causes beyond prediction markets. However, the growth of these platforms is real. H2 Gambling Capital estimated prediction markets reached about 27% of comparable US sports betting activity during the World Cup, up from roughly 9% at the start of the year. According to Bloomberg, much of that came from states where online sports betting stays illegal, reaching customers licensed books cannot. That last point matters most for tribes. In states like Florida, where the Seminole Tribe holds online betting exclusivity, an unlicensed competitor undercuts the compact itself. Indian Gaming Association chairman David Bean argued national totals mask regional pain, saying many tribes and regions are already seeing losses even as the aggregate rises. That is his stated position as an advocate, and the aggregate data neither confirms nor refutes it. With courts split and questions unresolved, many expect the fight to reach the US Supreme Court. The market-structure stakes feature in our iGaming trends 2026 report.
Frequently Asked Questions
Did US gaming set revenue records in 2026?
Yes. US commercial gaming hit a record $7.06 billion in May 2026, up 4.6%, reaching $34.0 billion across five months. Tribal gaming set a record $46.2 billion for FY2025, up 5.3%. Pennsylvania’s combined iGaming and sports betting revenue also passed its casino floor revenue for the first time.
Do the records prove prediction markets aren’t hurting gaming?
No. Revenue reports cannot measure betting that shifted to prediction markets, nor how much faster gaming might have grown without them. The industry argues the concern is long-term market structure, not current revenue. So record numbers and a genuine competitive threat can both be true at the same time.
What is the difference between trading volume and revenue?
Trading volume is the total value of all contracts traded on a platform. Revenue is what the operator actually keeps. Prediction markets’ estimated $50 billion June volume is not comparable to sportsbook revenue, just as betting handle is not the same as sportsbook revenue. Mixing the two overstates the comparison.
Why does the AGA oppose prediction markets?
The American Gaming Association argues sports event contracts let operators offer nationwide betting without state licences, taxes, or consumer protections. It estimates over $1.21 billion in lost state tax revenue, though that is the trade body’s own advocacy figure. It wants Congress and regulators to place the contracts outside commodities law.
Why do prediction markets threaten tribal gaming specifically?
Tribal gaming often relies on exclusivity under state compacts and IGRA. In states like Florida, where the Seminole Tribe holds online betting exclusivity, an unlicensed prediction market reaching local users undercuts that exclusive right. Much prediction-market growth comes from states where online sports betting is otherwise illegal.
Where is the prediction-markets dispute heading?
Toward the courts, and possibly the US Supreme Court. State and federal courts have reached conflicting conclusions on whether sports event contracts are gambling or commodities. With litigation across many states and over two dozen bills in Congress, the jurisdictional question is likely to stay unresolved for some time.
This article has been thoroughly researched and reviewed by the CasinoBait editorial team to ensure accuracy and relevance for Asian casino players.
