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Robinhood’s chief executive said states pushing back on prediction markets may be motivated in part by a simpler concern: protecting gambling tax revenue.
According to IndexBox, the CEO made the remarks in an interview with Bloomberg Television while arguing that states have a financial incentive to defend existing revenue streams tied to licensed sportsbooks and state-run lotteries. That is especially relevant in New York, where mobile sports betting is taxed at 51%.
Why New York is central to the debate
The source says state and local tax collections from sports betting reached $3.71 billion in calendar 2025, based on $16.96 billion in sportsbook revenue and $166.94 billion in handle, citing American Gaming Association data.
New York stands out in that system. The report says mobile operators in the state generated about $2 billion in gross gaming revenue in 2024 and paid more than $1 billion in state taxes. It also says New York and Illinois account for close to half of all state sports betting tax revenue.
The article also points to lotteries as another reason states may be wary of competing products. It says 45 states run lotteries and that those programs transferred about $30.6 billion to beneficiaries in fiscal 2024.
Prediction market growth is adding pressure
The same report says Kalshi and Polymarket combined for $50.59 billion in trading volume in July, citing data from The Block. It also notes that the figure reflects notional trading volume, not revenue or a taxable base.
Open interest across the two platforms reportedly fell during July from about $2 billion to $1.2 billion, while the month’s trading activity was partly boosted by the World Cup.
For New York readers, the immediate takeaway is not that any policy change has happened. Rather, the dispute highlights a growing conflict between state-regulated gambling systems that generate major tax dollars and prediction markets that are attracting significant trading activity outside the traditional sportsbook model.
What to watch next
One key unanswered question is which states are actively suing or otherwise taking legal action against prediction markets. Another is whether state officials begin framing the issue more directly around lost tax revenue from sportsbooks and lotteries. For New York, that would matter because the state’s current betting model is one of the biggest tax producers in the country.
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Source: As reported by indexbox.io.
