Prediction Markets Group Claims AGA Shaped State Pushback
The Coalition for Prediction Markets has accused the AGA and some state gaming regulators of coordinating efforts to slow the growth of prediction exchanges. The group has sent letters to auditors and inspectors general in 20 states. It wants those offices to examine whether public agencies acted independently, or whether they relied on material prepared by the casino lobby.
Coalition Takes the Fight to State Watchdogs
The argument is based on documents from Maryland. According to the coalition, Maryland’s Lottery and Gaming Control Agency wrote to the Commodity Futures Trading Commission in 2025. In the letter, the agency had expressed its disapproval of prediction markets. A Fox45 Baltimore investigation based on FOIA records found that the language closely mirrored an AGA draft.
For the coalition, this is not just an issue of drafting. The coalition believes that state regulators might have used their official position to further the interests of the private gambling industry group.
Maryland Emails Put Independence in Focus
The materials from Maryland provide the debate with a paper trail. The coalition contends that director John Martin circulated a cease-and-desist order that Nevada regulators had issued to Kalshi. He is also alleged to have sent AGA documents, which included a draft letter to the federal regulator and a list of email addresses of the commissioners.
Maryland has previously treated sports event contracts as a gambling-law issue. They argue that the nature of these products is similar to sports gambling and, therefore, should fall under gambling laws.
The same stance has been taken by AGA in their official statements. The association contends that prediction markets are working around the state and tribal gambling system that regulates the operation of licensed sportsbooks. The AGA has argued that sports event contracts divert tax revenue from state and tribal gambling systems.
State Actions Become a Federal Test
The group is looking well outside of Maryland. It pointed out Utah, Minnesota, and Illinois as examples of the broader pressures applied to prediction markets.
Minnesota enacted a law in May that would criminalize operating, hosting, or promoting prediction markets from August 1. Illinois added tax and licensing requirements for prediction markets, treating them as sports wagering operators. The CFTC has argued that event contracts traded on CFTC-registered designated contract markets fall under federal jurisdiction, not state gambling law.
Court rulings have not moved in one direction. Kalshi won protection in Arizona, where a federal judge blocked the state’s criminal case tied to gambling-law allegations. At the same time, a Michigan judge temporarily blocked Kalshi from offering sports-event contracts to users located in the state.
Key Takeaways
The dispute is unlikely to end with one court ruling. For exchanges, the Maryland records are useful because they shift the argument away from product definitions and toward process. For state regulators, the risk is different. If enforcement starts to look too close to industry lobbying, their case against prediction markets becomes harder to sell.