Prediction markets could pull between $7.3 billion and $39.4 billion a year away from traditional US gaming, according to an economic study commissioned by the Indian Gaming Association (IGA). Economists James Klas and Matt Robinson of KlasRobinson Q.E.D. previewed the findings during the IGA's The New Normal webinar on 7 October.[1]
The full report — described as 84 pages long — had not been published at the time of the preview, so the figures below come from the authors' presentation and trade-press coverage rather than the document itself.
The four scenarios
The numbers are estimates of annual revenue diverted from casinos and sportsbooks, not losses that have already happened. They describe a market three to five years after it settles.[2]
| Scenario | Assumption | Estimated annual impact |
|---|---|---|
| 1 | Sports event contracts available in all 50 states, no new restrictions | $7.3bn ($1.5bn tribal, $5.8bn commercial) |
| 2 | More big sportsbooks move to a prediction-market model | $17.9bn ($3.6bn tribal, $14.3bn commercial) |
| 3 | iGaming-style products added | Not quantified in the preview |
| 4 | Sports and iGaming-style products, with wide operator migration | $39.4bn ($7.8bn tribal, $31.6bn commercial) |
The top scenario assumes casino-style contracts that, according to SBC Americas, the CFTC's current rule proposal would not allow.[2] For background on that proposal, see our report on the CFTC's first prediction-market rule proposal.
A crash warning
Klas also argued that within five to ten years the sector could face a crisis — triggered by heavy consumer losses, an integrity scandal or the failure of a major market maker.[1] That's the author's forecast, not a finding the study proves, and platforms such as Kalshi would dispute the premise.
How to read the numbers
Until the full report is out, several questions stay open:
- The model: what starting data and assumptions were used, and how sensitive the results are to them.
- Substitution vs new money: how much spending would really move from casinos and sportsbooks, and how much would be new.
- Product mix: sports contracts, financial contracts and hypothetical casino-style products behave very differently.
- The other side: no response from the platforms was included in the coverage we reviewed.
Why it matters
Tribal gaming has been one of the loudest voices against sports event contracts, arguing they bypass state compacts. Expect these figures to appear in comment letters to the CFTC and in state lawsuits. For how event contracts differ from a sportsbook bet, read prediction markets vs sportsbooks, and for the legal fight, are prediction markets legal?
Sources
- Prediction market news live blog — InGame, 8 October 2026 ↩
- Prediction markets gaming report warns — SBC Americas, 12 October 2026 ↩
