North American tribal nations see sports prediction outcome markets as a threat to their gaming exclusivity.
The Indian Gaming Association (IGA) is one of 10 tribal groups that recently disputed the legality of contract site Kalshi offering sports-betting-like contracts in the U.S. Commodity Futures Trading Commission’s (CFTC) roundtable marketplace.
“The IGA strongly urges the CFTC to make it clear that Sports Contracts are prohibited from being listed or made available for clearing or trading,” the nonprofit gaming group that represents more than 180 tribes wrote in a letter.
“Trading of Sports Contracts is gaming, violates state and federal law, and is contrary to public policy for various reasons," the letter continues.
“Importantly, allowing Sports Contracts to be listed and traded will interfere with the sovereign right of tribes and states to exercise their police power to regulate gaming within their respective territories - a right long recognized by courts throughout the United States.”
The IGA argued that the listing and trading of those contracts would destroy the value of tribal gaming compacts with U.S. states and hurt their sports betting revenue.
“Moreover, they directly violate the Commodity Exchange Act (“CEA”), and the plain language of the CFTC’s implementing regulations because they involve gaming and violate state and federal laws,” the IGA stated.
“Any determination that Sports Contracts comply with the CEA would therefore run afoul of the plain text of the CEA and its implementing regulations.”
Other opponents
The American Gaming Association, a U.S. trade industry group, said in comments to the CFTC that while it hadn’t publicly taken a side before, it wants to have more discussions about prediction-outcome markets it says hurt U.S. gaming.
“The AGA and our members have very strong concerns about the recent self-certification of what are essentially sports betting futures, which are currently available to retail customers in all 50 states,” said the organization that represents commercial and tribal casino operators as well as sports betting and iGaming companies.
“We believe these sports events contracts are problematic for a variety of public policy reasons.”
The AGA says the contracts pose “an unfair economic threat to sportsbook operators” in the U.S.’s 40 legal sports betting jurisdictions. The AGA also argues that the contracts introduce a “national” betting product that undermines state regulations, and it agrees with the IGA that “the availability of these products also tramples on tribal sovereignty.”
Tribal organizations that joined the IGA include the Arizona Indian Gaming Association; California Nations Indian Gaming Association; Confederate Tribes of Siletz Indians, Elk Valley Rancheria, California; Jamestown S’Klallam Tribe; Oklahoma Indian Gaming Association; Santa Ynez Band of Chumash Indians; Tribal Alliance of Sovereign Indian Nations; Vetnos LLC and Chicken Ranch Rancheria Me-Wuk Indians of California; and Yuhhaviatam of San Manuel Nation.
Adding to the market
The backlash comes a month after Kalshi, which burst onto the scene last November by offering election betting through its prediction-outcome markets, began offering Super Bowl, March Madness, and other sports options for its trading community.
Kalshi’s contracts relating to U.S. sports leagues will operate among other federally regulated markets like politics, economics, and culture.
The CFTC opposed Kalshi’s outcome markets during the 2024 U.S. election, but a federal judge ruled in favor of the site.
That, however, was during President Joe Biden’s administration. The CFTC has undergone leadership changes since President Donald Trump regained office last month.
