Tribes warn prediction markets threaten sovereignty in CFTC review

Native American tribes have strongly opposed the expansion of prediction markets into sports event contracts, warning that the move threatens their sovereignty and gaming revenues, according to comments submitted to the U.S. Commodity Futures Trading Commission (CFTC).

The CFTC is set to host a roundtable on prediction markets on April 30, 2025, following a public comment period that drew 19 submissions. Eleven of those came from tribal entities, reflecting a rare consensus in Indian Country against sports event contracts.

Tribal organizations argue that permitting the trading of sports contracts undermines their gaming exclusivity agreements under the Indian Gaming Regulatory Act (IGRA) and could divert revenues that fund essential tribal services.
    
“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) stated in its submission.

The tribes also raised concerns about the financial impact, noting that gaming compacts between states and tribes involve revenue-sharing agreements worth billions of dollars. The introduction of federally regulated sports contracts, they argue, could significantly erode these agreements.

Prediction markets such as Kalshi and Polymarket have expanded their operations beyond political and cultural event contracts to include sports, sparking industry concerns. These platforms, legal at the federal level, operate across all 50 states and are not subject to gaming taxes or responsible gambling measures, raising questions about their competitive impact on regulated operators.

“What is happening at the CFTC is a different kind of threat,” tribal gaming attorney Scott Crowell said at the Western Indian Gaming Conference on February 27. “It is a green light at the federal level… It makes all of these discussions about [sweepstakes, illegal platforms] moot if you can’t turn it red.”

The American Gaming Association (AGA) was the only major industry group to submit comments, warning that sports event contracts pose “problematic for a variety of public policy reasons.” While the AGA has remained neutral on election contracts and other prediction markets, it expressed strong reservations about sports betting futures being made available nationwide.

Other gaming operators, such as DraftKings, have yet to take a firm stance. During a February 14 earnings call, CEO Jason Robins downplayed the risks posed by prediction markets. “I don’t see [prediction markets] as a threat,” he said. “It increases the total addressable market for people who like those types of products, which is a good thing.”

While most comments opposed sports event contracts, the Campaign for Fairer Gambling (CFG) submitted a contrasting perspective, arguing that prediction markets could provide a more transparent alternative to traditional sportsbooks.

“If politics and cultural events markets are acceptable, then there is no inherent rationale to indicate that sports events are not,” CFG wrote in its submission. The group further suggested that prediction markets, which do not typically offer prop bets or in-play wagers, may have fewer integrity risks than traditional sportsbooks.