Native American tribes are pushing back against the expansion of prediction markets into sports event contracts, arguing that the move threatens their sovereignty and could undercut billions of dollars in gaming revenue. Their concerns have been submitted to the U.S. Commodity Futures Trading Commission (CFTC) ahead of a major roundtable discussion scheduled for April 30, 2025.
Strong Opposition from Tribal Entities
The public comment period on the CFTC’s review of prediction markets drew 19 submissions, with more than half—11 in total—coming from tribal entities. That level of unity is rare in Indian Country, underscoring the deep concern about how federally regulated sports contracts could impact tribal gaming.
At the core of their argument is the belief that allowing sports contracts to be listed and traded undermines existing gaming agreements under the Indian Gaming Regulatory Act (IGRA). These agreements give tribes exclusive rights to operate certain types of gaming, often in exchange for revenue-sharing deals with states.
One tribal organization put it bluntly: “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,” the Indian Gaming Association (IGA) wrote in its submission to the CFTC.
Billions at Stake in Revenue-Sharing Agreements
Tribes warn that the financial consequences of expanding prediction markets could be massive.
Gaming compacts between states and tribal nations generate billions in revenue, funding essential services like healthcare, education, and infrastructure. If prediction markets are allowed to enter the space unchecked, tribes argue, they could siphon off money that would otherwise flow to tribal communities.
- Many gaming compacts include revenue-sharing provisions that could be weakened if prediction markets disrupt the industry.
- Unlike tribal casinos, prediction markets are not subject to gaming taxes or responsible gambling measures, creating an uneven playing field.
- Tribes fear that new federally regulated markets could bypass state-level gambling laws entirely, eroding their exclusivity rights.
The Growing Footprint of Prediction Markets
Platforms like Kalshi and Polymarket have already expanded from political and cultural event contracts into sports betting-style markets. While legal at the federal level, these markets operate across all 50 states without the same restrictions placed on traditional gaming operators.
This raises concerns about fairness. Tribal casinos and state-licensed sportsbooks must adhere to strict regulations, while prediction markets enjoy a different set of rules. Critics argue that this creates an unfair competitive advantage for platforms that aren’t required to contribute tax revenue or fund responsible gambling programs.
A key question for regulators is whether sports event contracts should be classified as gaming—a category that falls under state jurisdiction—or as financial instruments, which would place them under federal oversight. The answer could have major implications for both tribes and the broader gambling industry.
What’s Next?
With the CFTC’s roundtable on April 30 fast approaching, the debate over prediction markets is heating up. Tribes are making it clear they want a seat at the table, warning that any move to approve sports contracts without their input could trigger legal challenges.
For now, the future of these markets remains uncertain. But one thing is clear: Native American tribes are prepared to fight to protect their gaming sovereignty.
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