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Some Native American gaming officials are calling for congressional action and more control of a type of wagering that they see as a danger to tribe sovereignty as prediction markets grow quickly.
Platforms like Kalshi and Polymarket, which provide what critics and tribes claim is a new kind of sports betting, are the target of a large portion of Indian Country's opposition to prediction markets.
Prediction markets' contracts for sporting events are comparable to gaming expansion, which is carried out by voters and tribal gaming organizations in several states, including Florida and California. David Bean, the chairman of the Indian Gaming Association (IGA), claims that using yes/no exchanges to wager on sports violates numerous rules.
"Sports betting that is being conducted through prediction markets violates tribal, federal, and state laws – including the Indian Gaming Regulatory Act (IGRA), 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 goes on to say that in states where gaming expansion is a tribal issue, neither the Commodities Exchange Act (CEA) nor the Commodities Futures Trading Commission (CFTC), which oversees businesses like Kalshi and Polymarket, provide purveyors of event contracts with protections to offer sports wagering.
Bean claims that the weakest link for oversight was chosen by prediction markets
The CFTC is the "smallest and weakest" financial regulator, according to Bean. Prediction markets' desire for that agency's supervision is therefore not coincidental.
He might be right because self-certification has played a major role in the explosive growth of sports event contracts and, more recently, parlays on sites like Kalshi. In essence, a prediction market operator notifies the CFTC that it intends to provide something it hasn't offered before, and the associated event contracts go live within a few days if the commission doesn't object or ask for further details.
According to Bean, prediction markets are dependent on that inaction and the necessity for the CFTC to regulate sports event contracts more aggressively.
“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 Is a Battleground for Prediction Markets
California, the most populous state, has long been a target for sports betting companies, but the Golden State has remained off-limits because voters and tribal casinos there aren't eager to allow online sports betting. However, California is becoming a potential battleground in the prediction markets argument since prediction markets are taking advantage of a legislative gap that permits them to offer contracts for sporting events there.
Tribes in California are subject to exclusive compacts with the state, which means that any extension of gambling beyond the lottery must go via them. The chairman of the California Nations Indian Gaming Association (CNIGA), James Siva, isn't afraid to reiterate this argument. He continues by saying that in order to preserve tribal sovereignty, Congress must act.
“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.
