Tribes and Government to Discuss Sports Betting Issues

Leaders of Native American gaming tribes in the United States are set to engage in a virtual meeting on Thursday with Caroline Pham, acting chair of the Commodity Futures Trading Commission (CFTC), focusing on ongoing issues related to prediction markets, particularly those involving sports event contracts. Despite widespread anticipation, details about the meeting’s agenda remain scarce even among participants, underscoring the opaque nature of federal oversight on this contentious issue.

The virtual call, which will include key figures such as Victor Rocha and Jason Giles from the Indian Gaming Association, as well as tribal attorneys and tribal nation leaders, represents the latest development in a prolonged dispute over prediction markets’ impact on tribal gaming compacts. Notably, Rodney Butler, chairman of the Mashantucket Pequot Tribal Nation in Connecticut, has voiced strong concerns about how these markets undermine existing state-tribal agreements.

Butler emphasized that prediction markets “violate our agreements” and “circumvent” government-to-government compacts, which provide tribes with exclusive gaming rights in exchange for significant revenue contributions to their states. Connecticut, unlike some other states, has yet to issue cease-and-desist orders or lawsuits against operators like Kalshi and Crypto.com, but state officials are reportedly investigating.

Legal Battles and Industry Responses

The legal landscape remains fluid. Kalshi, a leading prediction market platform, faces lawsuits in Nevada, New Jersey, and Maryland. While it has won preliminary injunctions in Nevada and New Jersey, appeals are ongoing, and Maryland’s case is still developing. Attorneys Bradley Bledsoe Downes and Joseph Webster noted the increasing involvement of commercial interests such as casino associations, indicating that the conflict is drawing broader industry attention.

Tribal voices, however, have been notably absent from these legal battles. No tribal amicus briefs have been filed to date, leaving tribes out of key judicial deliberations despite the direct impact on their compacts.

The CFTC’s Emerging Role

Historically focused on commodities and derivatives like agricultural products, the CFTC finds itself unexpectedly at the center of national sports betting regulation through its jurisdiction over prediction markets. The agency’s self-certification process, which allows exchanges to list contracts without prior approval, has come under scrutiny for allegedly enabling exchanges like Kalshi to push boundaries without adequate oversight.

The CFTC is currently experiencing internal turbulence, with a wave of resignations including acting chair Caroline Pham, and uncertainty about leadership continuity. These factors complicate the agency’s ability to provide clear regulatory guidance, intensifying uncertainty for tribes and market participants alike.

Kalshi has aggressively promoted its platform as a mainstream financial product. Its CEO recently announced plans to integrate Kalshi markets into major brokerage apps, aiming to normalize prediction markets as legitimate economic instruments. However, the company’s visibility has also invited controversy.

A recent incident involving California gubernatorial candidate Kyle Langford buying contracts on his own election outcome raised ethical and regulatory questions. Kalshi’s compliance teams reportedly are investigating the matter, but public transparency remains limited. In a separate episode, Kalshi briefly announced a partnership with Elon Musk’s xAI, only to retract it within hours, highlighting the unpredictable nature of the company’s public relations and strategic moves.

They’re violating our agreements, they’re violating our compacts that we’ve worked very hard for…. It just completely circumvents that government-to-government relationship.

Looking Ahead

Thursday’s CFTC call with tribal leaders comes amid a period of heightened uncertainty and potential regulatory shifts. For tribes reliant on gaming revenues secured through exclusive compacts, the expansion of prediction markets into sports betting represents a direct challenge to established economic and legal frameworks.

As tribal leaders prepare to engage with federal regulators, many express cautious skepticism about the outcomes, fearing the meeting may amount to little more than a courtesy update. Nevertheless, the interaction signals growing recognition of tribal concerns in an evolving regulatory environment where the roles of states, tribes, federal agencies, and private companies are increasingly contested.