This past weekend, Kalshi announced a first-of-its-kind partnership with a federally recognized tribe, in which the CFTC-regulated prediction market will power SaltTrade Derivatives, a platform brand that will be owned by the Tunica-Biloxi Tribe of Louisiana. With the CFTC’s blessing, the Louisiana tribe, which operates the Paragon Casino Resort in Marksville and is made up of approximately 1,600 members, will launch a “skin” of Kalshi’s prediction market platform.
For prediction market advocates and the Tunica-Biloxi Tribe, the partnership marks an important step toward bringing innovative sports-contract trading into the mainstream in a way that bolsters the binary “bid-ask” format that traditional “house odds” sports betting doesn’t offer.
“This partnership represents exactly the type of opportunity Indian Country should be pursuing, where Tribes are owners, innovators and leaders, not just participants,” said Tunica-Biloxi Chairman Marshall Pierite on Friday.
But for multi-billion-dollar tribal gaming interests, the Tunica-Biloxi Tribe’s decision (facilitated by the CFTC) to team up with an exchange that many argue offers “sports betting in disguise” is a threat to tribal sovereignty that exposes entities that become PSPs to significant litigation risk in light of the Ninth Circuit’s recent ruling that prediction market sports contracts fall under Class III gaming that’s covered by the Indian Gaming Regulatory Act of 1988.
On Wednesday, the Indian Gaming Association posted a response (via Pechanga.net) to the Tunica-Biloxi Tribe’s partnership with Kalshi, which specifically calls out the CFTC and SEC for allegedly engaging in a “coordinated effort to end run the Clarity Act,” which “is only unifying our opposition to prediction markets and providing new allies in this cause.”
IGA’s criticism of the Kalshi deal with the Tunica-Biloxi Tribe is four-fold:
The Tunica-Biloxi Tribe of Louisiana operates MobiLoans, an online lending service that has come under fire in Florida and other jurisdictions for alleged “predatory” interest rates that violate the state’s laws on usury. However, a Florida state court (Volusia County) dismissed Reyes v. MobiLoans, LLC in 2022 based on the premise that the company functioned as an “arm of the tribe” that benefited its general welfare.
In 2024, the Eleventh Circuit further backstopped the Tunica-Biloxi Tribe of Louisiana’s tribal immunity by overturning a lower court’s decision that held the tribe liable for the actions of third-party debt collectors (see McIntosh/Dunn v. MobiLoans).
Those key rulings point to limited liability for the Tunica-Biloxi Tribe as it relates to the recent partnership with Kalshi. Due to geography and jurisdiction, the tribe’s agreement to act as a skin for Kalshi prediction market sports contracts would apparently shield the tribe’s peripheral operations from liability from now until a Supreme Court decision regarding the categorization of prediction market sports contracts is handed down (if SCOTUS decides to hear one or more prediction market cases and if the nation’s highest court rules against prediction markets).
Loading …
