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Tribal countries in North America are resisting sports prediction outcome markets, claiming they jeopardize their unique gaming rights. The legality of Kalshi’s contracts that resemble sports betting was recently contested by the Indian Gaming Association (IGA) and nine other tribal organizations. The disagreement surfaced during a roundtable discussion held by the U.S. Commodity Futures Trading Commission (CFTC).
In a formal letter, the IGA urged the CFTC to block these contracts. “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 group stated.
The letter further argued that these contracts amount to gambling, violating state and federal laws while undermining tribal sovereignty. “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,” the IGA asserted.
The organization also expressed concerns about the impact on tribal gaming compacts with states, which generate significant revenue through sports betting.
Concerns regarding the impact of these contracts on the regulated U.S. gaming business were also voiced by the American Gaming Association (AGA). The AGA, which had not previously taken a stand, is now looking for more dialogue on the matter.
“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,” the association noted.
The AGA believes these contracts pose an economic threat to sportsbook operators and undermine state-level regulations. It also echoed tribal concerns, stating, “the availability of these products also tramples on tribal sovereignty.”
The IGA joined a number of other tribal groups in rejecting these contracts, such as the California Nations Indian Gaming Association and the Arizona Indian Gaming Association.
With the establishment of prediction-outcome markets for big sporting events like the Super Bowl and March Madness, Kalshi has been growing quickly. Contracts on the site include a number of topics, such as politics, economics, and culture.
During the 2024 U.S. election, Kalshi’s election-related result markets were previously contested by the CFTC. But a federal judge decided in the platform’s favor, allowing it to continue operating. Despite this win, the regulatory landscape has changed because the CFTC is now under the control of President Donald Trump’s administration, which may change its position.
With ongoing legal and regulatory challenges, the future of sports prediction contracts remains uncertain.