Sportradar and OpenBet have decided not to renew their memberships with the American Gaming Association (AGA) and the route out of the trade body is starting to look like a well-worn path.
First DraftKings and FanDuel bailed out, and Fanatics joined them not long after. All five of these former AGA members now implicitly seem set on giving chase to the runaway prediction markets sector.
When FanDuel and DraftKings left, there was talk of a misalignment “in certain areas.” Something of an understatement maybe, but 'misalignment' is not wrong. There is definitely a major misalignment between the AGA and those with interest in prediction markets.
This is the reason new battle lines are having to be drawn. Despite the industry being a stronger power when united, it seems everyone is being forced to pick a side.
The AGA has certainly picked its side, and instead of mourning the loss of those members, it is consolidating the land-based lobby alongside the Indian Gaming Association (IGA) and calling for assistance from Congress.
On January 12, the AGA and IGA released a joint letter condemning prediction markets and arguably escalated the tenor of the argument by calling upon Congress to involve itself over the head of the CFTC.
Why are members leaving the AGA?
The short answer is prediction markets. Though it may not seem like it, we are still effectively in the early stages of the prediction market argument and many are still deciding where they stand. These departures represent the choosing of sides, rather than the argument itself.
The sector itself is moving very quickly, but the types of lobbying that the AGA is built for moves slower than that. State level legal proceedings and federal class actions are trickling on, but the sorts of decisive steps that can be taken by Congress or the Supreme Court still feel quite distant prospects.
So what we’re seeing right now isn’t the battle for prediction markets itself, but the mustering of allies and opponents – it seems neutrality may not be a sustainable position. The likes of Sportradar and OpenBet would probably have liked to stay out of the argument if possible, but their stance is now quite clear.
It would surely have been better for them to serve both the mainstream sports betting industry and the prediction market sector with its uncertain destiny. And with that in mind, leaving the AGA is a huge statement, just as it was for FanDuel, DraftKings and Fanatics before them.
Neither OpenBet nor Sportradar has responded to comment on the split, but the actions are loud enough. This contrast between action and words speaks to a reluctant departure and extreme internal pressures forcing the issue. It also speaks to the fact that many more departures could soon follow now that the precedent is set.
Why is the AGA reluctant to directly criticize departing members?
As we say, the real final throes of conflict between the established industry and prediction markets haven't truly begun, and so outwardly, there is still some caution. In terms of outward messaging, there is a curious mixture of opposition in theory and appeasement in practice.
The AGA leadership was already strongly opposed to prediction markets in theory when FanDuel and DraftKings left. But when it came to comment directly on the split, a spokesperson for the association told Global Gaming Insider: “In discussion with DraftKings and FanDuel, the AGA has accepted their request to relinquish their membership, effective immediately. We wish them the best, and we expect to maintain close ties in our mission to promote and protect legal, regulated gaming.”
Clearly there was a desire not to burn any bridges. This time around, it’s a similar story. The recent letter with the IGA was a rallying cry to potential allies and unequivocal in its condemnation, but when asked to comment on the significance of OpenBet and Sportradar’s departure, the AGA has again refused to directly criticize, saying instead: “We can confirm that Sportradar and OpenBet are no longer members of the AGA and wish them well in their future endeavors.”
Who are the AGA’s biggest allies?
Instead of focusing on admonishments, the AGA’s most explicit messages are more about building alliances of ideology than taking swipes at specific companies. The joint letter with the IGA was about market competitors standing together in the face of a bigger threat.
Dara Cohen, Senior Director of Strategic Communications and Media Relations at the AGA, has confirmed as much, saying to Global Gaming Insider: “Tribal gaming has always been a valued and essential partnership for the AGA. We’ve worked closely with tribal leaders and organizations for many years, and that collaboration has only deepened as we’ve aligned around shared priorities like consumer protection, sovereignty, and preserving a strong legal market.”
While sports betting in the US is still in its youth, many of those operators and suppliers are streamlined enough to feel that they can go with the flow of prediction markets. Those long-established giants of land-based gambling, with their assets built down into the soil, are not going to be feeling quite so optimistic.
AGA President & CEO Bill Miller joined the Huddle at ICE Barcelona (the full interview will be available soon) and was adamant the regulated gaming industry will ultimately "win" against prediction markets.
In the interim, though, here are two more companies that appear to disagree.
Former SVP of Strategic Communications at the AGA, Joe Maloney, recently left to join the Sports Betting Alliance as its new CEO
