The American Gaming Association (AGA) faces further setbacks as two additional members opt out amid a growing divide within the U.S. gambling sector regarding prediction markets, as noted in a recent membership list review prior to the upcoming annual renewals.

This month, sportsbook technology firms OpenBet and Sportradar chose not to continue their memberships with AGA, joining previous withdrawals from DraftKings, FanDuel, and Fanatics, all of which have initiated or expressed plans to provide prediction market products. As of now, OpenBet and Sportradar have not revealed their reasons for this decision.

This trend highlights an increasing rift between technology-driven betting companies and the AGA, which has staunchly opposed prediction markets that permit users to engage in trading contracts linked to sports outcomes. Regulated federally by the Commodity Futures Trading Commission (CFTC), these markets are classified legally as derivatives.

The AGA contends that these offerings bear a close resemblance to conventional sports betting but function outside state regulatory frameworks, thus circumventing essential consumer protection laws, integrity standards, and state tax obligations that licensed sportsbooks are mandated to adhere to.

“The departing members are pursuing different strategies concerning prediction markets that do not align with AGA’s fundamental commitment to preserving state and tribal governance,” stated Dara Cohen, AGA’s senior director for strategic communications and media relations, in an email to InGame. “We remain committed to advocating for the legal, state- and tribal-regulated gaming infrastructure.”

DraftKings introduced its prediction market product on December 19, followed by FanDuel, which started its prediction market in five states on December 22 and expanded nationally in January. Fanatics has also joined this sector. Notably, all three companies are no longer AGA members.

As its most significant online members depart, the AGA has aligned more closely with land-based casino operators and tribal gaming associations, who are also opposed to federally regulated sports event contracts. Over the past year, the association has enhanced its efforts with tribal organizations to campaign against what they term unregulated gambling.

In January, the AGA and the Indian Gaming Association jointly communicated with Congress, expressing concerns that prediction markets “undermine state legislation and tribal sovereignty” while conflicting with federal statutes intended to safeguard consumers and the integrity of financial markets.

AGA President Bill Miller further emphasized this stance in a letter to members in December, reaffirming that sports event contracts are gambling and should remain governed by state and tribal regulations.

“Our position is unequivocal: sports event contracts are classified as gambling, and regulation belongs to states and tribes,” Miller asserted. “In 2026, we will continue to champion this regulatory framework and uphold state authority alongside tribal sovereignty.”

The ongoing dispute highlights a larger division within the industry. Technology-centric firms have increasingly adopted prediction markets as a means to expand customer databases, especially in regions where online sports betting remains prohibited. Conversely, traditional casino operators, reliant on physical locations, are exhibiting greater caution.

Major casino operators with online betting platforms, such as Caesars and BetMGM, have avoided prediction markets due to concerns over regulatory oversight. Some regulators have issued warnings to licensees, although no direct enforcement actions have occurred.

In a noteworthy move last year, FanDuel relinquished its retail sports betting license in Nevada, while DraftKings withdrew a separate application following state regulatory pressure.

Investor sentiment towards prediction markets has been lukewarm. Shares of DraftKings and FanDuel remain significantly below their 52-week peaks despite the introduction of their prediction products late last year. Casino operators such as Caesars and MGM Resorts have also seen declines in stock prices, though analysts attribute these shifts to broader economic factors like reduced visitor numbers in Las Vegas rather than solely to prediction markets.