The sports betting industry hit a record revenue figure of $16.96 billion in 2025, the American Gaming Association stated Thursday.
Revenue peaked despite growing competition from prediction markets.
The association's figures showed that Americans legally bet $166.94 billion on sports in 2025, an 11% increase from 2024. The top sports betting markets remained New York, Illinois, and New Jersey, according to AGA data.
In a statement, the association took a jab at the increasingly popular prediction market space, as the new platforms remain entangled in litigation with state regulators and tribal groups. A top issue is the stark difference in taxation between the two: Traditional gambling markets pay state and tribal as well as federal taxes. Prediction market revenues are taxable only at the federal level.
Prediction markets that offer sports event contracts have diverted more than $500 million in potential sports betting tax revenue in the past year, the AGA report said. Prediction markets like Kalshi and Polymarket allow users to trade on the yes/no outcome of events, including sports.
Unlike legal sportsbooks, these platforms can operate in all 50 states, including California and Texas, where sports betting is not legal. The platforms also don't require state gambling licenses because they are regulated only by the federal government, which is a hotly contested political and legal issue.
State gaming regulators across the country allege that prediction markets violate state laws by offering event contracts similar to sports bets.
Kalshi argues that it does not fall under state jurisdiction and is instead regulated by the federal Commodity Futures Trading Commission. CFTC Chairman Mike Selig has taken the same stance in online posts and in an amicus brief supporting a federal-court lawsuit in Nevada targeting a prediction market company.
Former New Jersey Gov. Chris Christie, a strategic adviser to the AGA, posted on social media platform X: "If it walks like a duck and quacks like a duck ... predictive market sites are offering sports gambling in violation of the laws of all 50 states. It's as simple as that."