Competition intensifies between tribal casino businesses and prediction market platforms
In the rapidly evolving world of prediction markets, several key developments have emerged, shedding light on the relationship between these markets and tribal gaming.
Giles, the Executive Director of the Indian Gaming Association (IGA), has expressed surprise at the lack of comment from U.S. sports leagues regarding the lack of regulation and oversight in sports wagering. Meanwhile, the IGA is ramping up efforts to support tribes in California against companies offering sports event contracts.
One such company, Kalshi, is making headlines with its return to the U.S. market, raising questions about jurisdiction and enforcement. The landscape around Kalshi is particularly interesting, given that Brian Quintenz, a member of Kalshi's board, is appearing before the Senate for his confirmation hearing to lead the Commodity Futures Trading Commission (CFTC). Chris Gerlacher, a political analyst with Prediction News, predicts that Quintenz will be approved out of committee on a party-line vote, despite some political baggage with his Senate confirmation.
However, the California case against prediction market companies, which includes Kalshi as a defendant, has brought forth an allegation of violating tribal sovereignty and tribal gaming ordinances. Three California tribes have sued Kalshi and Robinhood in federal court over prediction market offerings labeled as illegal sports betting on tribal lands.
Victor Rocha, conference chair of the IGA tradeshow and webinar host, emphasises the importance of understanding the current situation, potential risks, and preparations for the future, as these platforms are pushing deeper into regulated space. Rocha also suggests that early entrants in nationwide sports wagering instead of state-by-state regulation will have control over the industry, leaving tribes out.
Prediction markets operate legally in the U.S. under CFTC federal oversight and are not considered traditional gambling or gaming regulated by tribal gaming laws. However, any tribal operation of prediction markets would require careful coordination with the CFTC and adherence to federal commodity futures rules, rather than relying solely on tribal gaming regulations.
The IGA has also highlighted policy issues with companies offering wagers on non-traditional events, such as the attire of political leaders, and disputes over payouts from those who bet against Volodymyr Zelenskyy, the President of Ukraine, wearing a suit before July.
As the landscape around prediction markets continues to shift, consultation with legal experts specializing in tribal gaming law and commodity futures regulation would be essential for a clear understanding of the evolving regulatory environment.
Sports-betting platforms like Kalshi, as they push into regulated spaces, are prompting debates about jurisdiction and compliance, given the claims of violating tribal sovereignty and gaming ordinances in California. Considering the increasing involvement of prediction markets in sports-betting, understanding the evolving relationship between these markets, tribal gaming laws, and federal commodity futures rules becomes crucial.
