The Indian Gaming Association (IGA) has become one of at least ten tribal groups to have called out prediction markets for breaking the law.

As a result, the association has exerted the Commodity and Futures Trading Commission (CFTC) to stop prediction markets from offering sports futures, Sportico reported.

IGA becomes the latest tribal organization to oppose sports betting future markets

With Kalshi now venturing outside of politics and entertainment bets, straight to Super Bowl and March Madness options, the IGA has said that the CFTC ought to step in and ensure that the law is upheld.

In a letter, the organization, which reunites 180 individual tribes, said that sports contracts should be prohibited and banned from clearing or trading, and the tribal gaming sector is hardly the only one to argue against these platforms.

The American Gaming Association has criticized prediction markets that feature sports events as a sort of "legal acrobatics." The letter from the IGA similarly accused prediction markets of using sports contracts as a form of veiled gaming, which violates state and federal law, and is contrary to public policy, adding:

"Importantly, 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 - a right long recognized by courts throughout the United States."

The IGA stipulated that prediction markets on sports violated the Commodity Exchange Act and were therefore subject to CFTC’s regulation.

However, the CFTC has found itself struggling to restrict prediction markets, so much so that Kalshi, arguably the most prominent platform, managed to sue the regulator and launch prediction markets on politics in November 2024.

Prediction markets are not checked by existing gambling laws

Sports contracts, however, could be different, as they directly encroach on sports betting territory, which is the preservation of regulated sportsbooks who do not appreciate the competition, especially when they see prediction markets as a way to pass around the strict regulation and taxation they face.

Furthermore, the so-called "self-certification of sports betting futures" is an issue as they are available in 50 states, and they are not subject to the same restrictions as sportsbooks.

The IGA is concerned that through these prediction markets, the value of tribal gaming compacts in the United States will be destroyed, as tribal gaming operators will face an increasing decline in their operations.

The association similarly argued that the root of the issue doesn’t have to do with competition, but competition that does not play by the same rules. An upcoming roundtable later in March will most likely be joined by the IGA and AGA, as well as other stakeholders.

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