Indian Gaming Association Raises Concerns Over Prediction Markets

The Indian Gaming Association (IGA) has emerged as one of at least ten tribal groups voicing concerns over prediction markets allegedly violating legal standards.

Consequently, the association has urged the Commodity and Futures Trading Commission (CFTC) to intervene and prevent prediction markets from offering sports futures, as reported by Sportico.

IGA Joins Other Tribal Organizations in Opposing Sports Betting Future Markets

Kalshi’s recent expansion into areas beyond politics and entertainment, including Super Bowl and March Madness options, has prompted the IGA to call upon the CFTC to uphold legal standards. The association, which represents 180 individual tribes, has emphasized in a letter that sports contracts should be prohibited and banned from clearing or trading. The tribal gaming sector is not alone in its opposition to these platforms.

The American Gaming Association has also criticized prediction markets that incorporate sports events, describing them as a form of ‘legal acrobatics.’ The IGA’s letter similarly accuses these markets of disguising gaming activities as sports contracts, which they argue breaches state and federal laws and contradicts public policy. The letter further stated:

‘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 has asserted that sports-related prediction markets violate the Commodity Exchange Act, making them subject to regulation by the CFTC. However, the CFTC has faced challenges in restricting these markets, as demonstrated by Kalshi’s ability to sue the regulator and launch political prediction markets in November 2024.

Prediction Markets and Their Evasion of Existing Gambling Laws

Sports contracts may pose a different issue as they directly encroach upon the domain of sports betting, which is protected by regulated sportsbooks. These sportsbooks are not in favor of the competition, especially since they perceive prediction markets as a means to circumvent the strict regulations and taxes they face.

Moreover, the concept of ‘self-certification of sports betting futures’ raises concerns, as these markets are accessible in all 50 states and are not bound by the same limitations as sportsbooks.

The IGA is apprehensive that these prediction markets will undermine the value of tribal gaming compacts in the United States, potentially leading to a decline in operations for tribal gaming operators.

The association contends that the core issue is not simply competition, but rather competition that does not adhere to the same rules. An upcoming roundtable scheduled for later in March is expected to include participation from the IGA, AGA, and other stakeholders.