AGA: Prediction markets threaten betting as NFL handle flatlines
The AGA warned the issue is particularly pronounced among younger consumers, with Kalshi reportedly handling some $5.1bn in volume from users aged between 18 and 20
The American Gaming Association (AGA) has warned prediction markets are increasingly diverting sports betting activity away from regulated sportsbooks, after forecasting $29.5bn will be wagered legally on the 2026 NFL season – virtually unchanged from last year.
According to the AGA, the estimated figure would be only marginally higher than $29.4bn in the previous year. The forecast includes preseason games, futures booked as early as March, the playoffs and Super Bowl LXI in March 2027.
The trade body said the lack of growth comes despite continued expansion in legal sports betting. It pointed instead to the rapid rise of prediction markets offering sports-related contracts.
The AGA estimated that more than $1.3bn in potential state gaming tax revenue has been diverted to prediction markets since 2025. It also warned that the products are increasingly competing directly with regulated sportsbooks.
This issue, it said, is particularly pronounced among younger consumers. The AGA estimated that around $5.1bn of Kalshi’s trading volume has come from users aged between 18 and 20 – a demographic generally unable to place sports bets through regulated US sportsbooks.
The growing appeal of prediction markets among existing sports bettors was also highlighted by new research from Optimove. Its survey of 926 US NFL bettors found 84% were aware of prediction markets, while 60% said they planned to trade, buy or sell event contracts during the year.
AGA flags concerns around ‘backdoor sports betting’
The AGA’s warning came as the NFL prepares for the kick-off of its 2026 campaign this week. The Seattle Seahawks will host the New England Patriots in the season’s opening game on 9 September.
Ahead of this, AGA president and CEO Bill Miller said prediction markets pose a major threat to legal wagering. He described the former as “backdoor sports betting”, adding that it is becoming harder for consumers to distinguish what is legal and what is not.
“We’re excited for the NFL season to kick-off, as are millions of fans eager to engage with their favourite teams. Since the Supreme Court struck down the federal sports betting ban in 2018, legalised sports betting had seen tremendous growth.
“But this year is different. Since the widespread launch of backdoor sports betting on so-called ‘prediction markets,’ the growth of legal handle has stalled.”
Miller added that prediction market platforms are “dangerously” misleading consumers by marketing sports wagers as an investment, rather than entertainment.
“Kalshi and other prediction markets say they don’t need to follow state- and tribal- regulated sports betting laws or pay state gaming taxes. Their defiance means consumers, including teenagers and students, placing bets without the protections, oversight, and accountability that the legal market provides.”
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