Tribal gaming representatives across the country are voicing their disapproval of prediction market apps following the April 16th congressional testimony provided by CFTC Chairman Michael Selig. Prediction market companies including Kalshi and Polymarket are seeking a legal pathway to offer their products to American citizens nationwide, but are facing heavy resistance from tribes, states, and high profile members of Congress.
In a press call with Tribal Business News over the weekend, Indian Gaming Association Chairman David Bean warned that classifying prediction market products as event contracts rather than bets “wipes out the foundation of tribal exclusivity.” The Indian Gaming Regulatory Act was signed into law by President Ronald Reagan in October 1988.
Since then, tribes have engaged with individual states, forming compacts/agreements that grant exclusive market access for most gaming activity. “Prediction markets threaten these rural jobs and the progress that we’ve achieved by violating our laws, federal laws, and the laws of our state government partners,” Bean told TBN staff writer Chez Oxendine. “That’s not modernization; that’s erasure.”
The current proposal from the CFTC (Commodity Futures Trading Commission) suggests that prediction market apps offer “swaps” and “futures contracts” that fall under the federal government’s jurisdiction. Selig’s testimony before Congress also implied that prediction markets “play a role in price discovery” — a subtle acknowledgement of the split-second, behind the scenes pricing competition that takes place every time a customer virtually clicks or taps on a “yes/no” button.
During the hearing, Representative Jim Costa (D-CA) found similarities between predictions and traditional gaming activities. “In too many cases, it’s just gambling by another name.” Costa then called out prediction market apps for accepting trades related to “war, instability, and suffering” amid current global affairs.
A formal regulatory override by the federal government would, in practice, enable prediction market entities to circumvent state restrictions, prohibitions, and taxation on gambling and sports betting. The CFTC has set a deadline for written comments for April 30, 2026.
Before prediction markets came along, the friction between “tribal” and “commercial” gaming interests was palpable, especially in the battleground state of California. The groundswell of momentum to provide a legal carve-out for sportsbook apps in the Golden State (Proposition 27) was soundly defeated in 2022. Combined, the two sides of the lobbying sphere spent nearly $600 million to sway California voters.
For online casino and sportsbook apps that have secured legal status in various states throughout the country, market expansion is perceived as a rising tide that lifts all boats. Not so for tribal gaming endeavors.
Eventually, gaming markets mature. New customers become more scarce; acquisition costs inevitably increase. The entertainment budgets of legacy bettors falter as operators within an expanded market seek to maintain their respective bottom lines.
The realities of market cannibalization are front and center for California Nations Indian Gaming Association Chairman James Siva, who says that prediction markets are the “fastest-moving threat” the tribal gaming industry has witnessed since IGRA awarded it with federal regulatory status in 1988.
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