- At least one tribal gaming leader says sports betting through predictions violates laws.
- He says the CFTC and the Commodities Exchange Act (CEA) don’t shield prediction markets from those violations.
- A California tribal gaming leader is pushing for congressional action.
As prediction markets rapidly expand, some Native American gaming leaders are pushing for congressional action and increased oversight of a form of wagering they believe threatens tribal sovereignty.
A significant part of Indian Country’s pushback against prediction markets is platforms such as Kalshi and Polymarket offering what tribes and other critics assert amounts to a new form of sports wagering. The sports event contracts offered by prediction markets are akin to gaming expansion, which in many states, such as California and Florida, runs through tribal gaming entities and the voters. Indian Gaming Association (IGA) Chairman David Bean says sports wagering via yes/no exchanges runs afoul of myriad laws.
Sports betting that is being conducted through prediction markets violates tribal, federal, and state laws – including the Indian Gaming Regulatory Act, which expressly provides tribal governments with exclusive authority to regulate gaming on Indian lands in partnership with states and the National Indian Gaming Commission (NIGC),” he said in a statement.
The IGA leader adds that neither the Commodities Exchange Act (CEA) nor the Commodities Futures Trading Commission (CFTC), which regulates companies like Kalshi and Polymarket, afford purveyors of event contracts protections to offer sports wagering in states where gaming expansion is a tribal issue.
Bean Says Prediction Markets Picked Weakest Link for Oversight
In Bean’s opinion, the CFTC is the “smallest and weakest” financial regulator. As a result, it’s not a coincidence that prediction markets want oversight from that agency.
He may be onto something because the rapid proliferation of sports event contracts and, more recently, parlays on platforms like Kalshi has largely occurred by the process of self-certification. Essentially, a prediction market operator informs the CFTC of its intent to offer something it hasn’t previously featured and if the commission doesn’t block that move or request more information, the related event contracts go live in a matter of days.
Bean says prediction markets rely on that inaction and that the CFTC needs to take a more proactive approach to regulating sports event contracts.
“We demand that the CFTC do its job, and short of that — we urge Congress to act by amending the CEA to reinforce the existing prohibition against gaming,” adds Bean. “Tribes have fought for too long and worked too hard to build and preserve the integrity of our industry and the resources that enable tribal governments to provide for their communities.”
California Among Prediction Markets Battlegrounds
As the most populous state, California has long been coveted by sports betting operators, but the Golden State has been off limits because tribal casino and voters there aren’t in a hurry to approve online sports wagering. However, prediction markets are tapping into a regulatory loophole allowing them to offer sports event contracts in California, making the state a potential battleground in the prediction markets debate.
In California, tribes have exclusive compacts with the state, meaning any form of wagering expansion outside the lottery runs through them. It’s a point James Siva, the chairman of the California Nations Indian Gaming Association (CNIGA), isn’t shy about reiterating. He adds Congress must take action to protect tribal sovereignty.
“Congress must act now to clarify that the CEA does not allow prediction markets to offer sports gambling and other casino-style games. Inaction threatens decades of protections for consumers, states, and tribes,” says the CNIGA leader.
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