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Economists James Klas and Matt Robinson of KlasRobinson Q.E.D. previewed the research during an Indian Gaming Association (IGA) webinar on Oct. 7.
The study models four scenarios over three to five years after the market stabilizes.
Its worst-case scenario assumes prediction platforms obtain approval for sports contracts and iGaming-style products across all 50 states, while major online gaming companies migrate as much business as possible to them.
Under that scenario, annual revenue losses total $7.8 billion for tribal gaming and $31.6 billion for commercial gaming, along with $8.3 billion in lost gaming tax revenue.
CFTC Rejects Casino-Style Products as Derivatives
The casino assumption faces a substantial regulatory obstacle.
On Oct. 9, the CFTC announced an interim final rule excluding casino-style gambling products, including wagers placed on sportsbooks and casino games, from the definition of a “swap.”
“Casino-style gambling products are not derivatives,” Chairman Michael S. Selig said.
The agency described the measure as codifying its longstanding position and clarifying the limits of its authority. It said the rule would take effect upon publication in the Federal Register.
That creates a problem for treating the study’s highest estimate as the expected outcome, because it would require casino-style products to enter a federal framework that the regulator says excludes them.
Sports Contracts Remain a Separate Fight
The study’s least expansive scenario assumes continued nationwide sports-contract trading without additional restrictions. It projects $7.3 billion in annual gaming revenue losses and 38,000 direct jobs lost.
Whether platforms can sustain nationwide access remains contested.
As CCN previously reported on Kalshi’s New Jersey court victory, the Third Circuit upheld an injunction preventing state gambling enforcement while litigation continued.
The ruling supported Kalshi’s argument that its sports contracts fell under federal derivatives oversight.
Tribal Governments Have More Than Casino Profits at Stake
The association commissioning the research has already campaigned against the expansion of prediction markets.
CCN reported in September that the IGA urged senators to oppose the CLARITY Act over concerns about federal authority and protections for tribal gaming.
Its objections centered on whether prediction platforms could bypass gambling rules that apply to established operators.
For tribal communities, gaming revenues also support public services.
Klas illustrated the stakes with an early casino feasibility study he conducted for a tribe seeking to finance public infrastructure.
“The casino existed, but the tribe was going to build a new water system and a new school,” he said.
Casino profits were intended to repay the bonds funding those projects.
“We’re talking about very basic fundamental infrastructure needs for people on tribal lands.”
Earlier reporting on gambling-sector layoffs highlighted several pressures on operators, including profitability demands and automation.
“Now the pressure is on margins, compliance costs, platform consolidation,” software developer Panayot Kalinov said to CCN at the time.
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
