Prediction Markets vs. the Data: Reading Tribal FY2025

Two facts about tribal gaming in mid-2026 sit uneasily together. The first is that Indian gaming just posted its strongest year on record: the National Indian Gaming Commission reported gross gaming revenue of roughly $46.2 billion for fiscal 2025, an increase of about 5.3 percent and the highest annual total in the industry's history, with seven of the eight NIGC regions growing year over year. The second is that tribal leaders have spent much of the year warning that prediction markets, the event-contract exchanges that let users trade on sports and other outcomes, are already draining revenue, with some estimating the hit at around 5 percent nationwide. Both claims can be broadly true at once. The interesting work is figuring out where the pressure actually lands.

The record and the soft spot

Start with the topline. The FY2025 record was driven overwhelmingly by the land-based floor, slots and table games, which still generate the vast majority of tribal gaming revenue. The Sacramento region, anchored by California, again led all NIGC regions. In other words, the core business grew. Sports betting, by contrast, is a small slice of tribal revenue, and it is the slice showing strain. Industry data indicated that sports-betting revenue in May 2026 was down almost 2 percent from the same month a year earlier, a dip the American Gaming Association partially attributed to the rise of prediction markets.

But even the sports-betting picture is not uniformly negative. Over the January-through-May window, sports-betting revenue was up roughly 8.5 percent year over year. A single soft month against very strong prior-year comparisons is not the same as a structural decline. That is the tension a careful reading has to hold: a growing category with one weak month, set against exchanges whose volumes have exploded.

How big are the exchanges, really

The scale of prediction-market activity is genuinely striking. Reported monthly volumes on the exchanges reached well over $20 billion in May and, by some accounts, surged toward $50 billion around the start of the World Cup. Those are enormous notional figures. The important caveat is that exchange volume and sportsbook revenue are not measured the same way. Volume counts the total value of contracts traded, including both sides of a position and rapid in-and-out activity, while gaming revenue counts what operators keep after paying winners. Comparing the two directly overstates the substitution effect. The honest conclusion is that prediction markets are large and growing fast, and that some share of that activity is drawing dollars that might otherwise have gone to tribal sportsbooks, but the precise displacement is difficult to isolate from the headline volume numbers. Our companion analysis on quantifying the erosion claim works through the estimation problem in more detail.

There is also a timing dimension worth naming. The exchanges' surge is recent and fast, while audited NIGC figures necessarily lag, reflecting fiscal years that have already closed. A record FY2025 largely captures a period before prediction markets reached their current scale. That means the topline strength and the leaders' warnings are not really describing the same moment: one looks backward at a strong, mostly land-based year, the other looks forward at a competitive threat that is still building. Reconciling them requires separating what the audited past shows from what the emerging trend implies, and resisting the temptation to fold both into a single narrative of either triumph or crisis.

Exchange volume and sportsbook revenue are not the same measure. Comparing them directly overstates how much prediction markets have actually displaced.

Why tribes are disproportionately exposed

Even if the 5 percent figure is a leader's estimate rather than an audited result, the concern behind it is well founded. Prediction markets are troubling for tribes for a reason that goes beyond raw dollars: they threaten the exclusivity that underpins the entire tribal gaming compact system. In many states, tribes pay for, and rely on, the exclusive right to offer certain forms of wagering. A federally regulated exchange offering sports-outcome contracts on or near Indian lands, without a tribal ordinance, compact, or revenue-sharing obligation, does not just siphon some handle. It calls into question what a state's promise of exclusivity is worth. That is why the fight has moved into the courts, with tribes pressing the argument that offering such contracts to users on reservations constitutes unregulated Class III gaming on Indian lands. A federal appeals court heard oral arguments on one such challenge in July.

What the numbers counsel

For operators and tribal governments, the data argue for precision rather than alarm. The land-based floor remains the engine, and it is healthy; the digital and sports-betting layer is where competition is intensifying and margins are thinnest. That points to a measured response: defend exclusivity aggressively in the legal and legislative arenas, where the real threat sits, while continuing to invest in the amenities and floor experience that actually drive the record revenue. Treating a single soft month as proof of collapse risks misallocating attention. Treating the exchanges as harmless because overall revenue hit a record risks missing a genuine structural challenge. The FY2025 numbers reward the operators who can hold both ideas at once. For a fuller picture of the sector's economic footprint, see the 2025 economic impact report, and use our market comparison tools to see how exposure varies by state.