A reference in providing expert solutions and strategic advisory in the global gaming industry, SCCG Management is constantly offering high-quality tools and academic materials about the sector.
In this case, as part of its deal with G&M News, the company is sharing an exclusive excerpt of its “Primer on Prediction Markets” report, which has been officially launched today. Let’s take a closer look at this very insightful document.
TRIBAL SOVEREIGNTY AND PREDICTION MARKETS
No examination of gambling or betting in the U.S. is complete without considering Native American tribal gaming, which operates under a unique legal framework. Tribal casinos and sportsbooks have become a major part of the U.S. gambling industry thanks to the Indian Gaming Regulatory Act (IGRA) of 1988, which recognized tribes’ rights to offer gaming on their sovereign lands (subject to certain conditions and state compacts). The emergence of prediction markets (especially sports-related markets) raises important questions about how tribal gaming interests intersect with this new form of wagering. In this section, we explore tribal perspectives, the outcomes from the May 2025 CFTC–Tribal summit, and potential opportunities or conflicts for tribes regarding prediction markets.
Tribal gaming context: IGRA establishes three classes of gaming. Class III (which includes casino-style gaming and sports betting) generally requires a compact between a tribe and the state, approved by the Department of Interior. Many tribes have negotiated exclusivity in their compacts. For example, a state might agree not to allow non-tribal casinos or sports betting in exchange for a share of revenue from the tribal operations. This means tribes often have exclusive rights to gamble in their regions (outside of state lotteries or racetracks). With the expansion of commercial casinos and state-licensed sports betting in recent years, some tribes have renegotiated compacts or sued states to protect their interests.
Now enter prediction markets: if a federally regulated exchange on the Internet offers something functionally similar to sports betting (and perhaps eventually other games or outcomes), tribes see it as competition that bypasses the carefully negotiated compacts. A key tribal concern is the erosion of sovereignty and economic benefits. Tribal casinos contribute significant revenue for many Native American communities, funding essential services. They fear that if people can just pull out a phone and bet on an outcome via Kalshi or others without stepping foot in a casino (or paying the tribe a share), it undercuts the value of their negotiated exclusivity.
Concerns raised by tribes: tribes have been very vocal in the CFTC’s proceedings on prediction markets. The California Nations Indian Gaming Association (CNIGA), representing many tribes in California, submitted feedback to the CFTC strongly urging that these event contracts “are not allowed under current law” and should remain prohibited. They essentially don’t accept the idea that changing the label to “event contract” makes it legal. They see it as an unlawful dodge around gambling laws, and they want the CFTC to make that crystal clear. Similarly, the National Tribal Gaming Commissioners & Regulators (NTGCR) called Kalshi’s product a “betting scheme” that has already siphoned money away from tribal economies. Phrases like “sports betting in disguise” encapsulate their stance.
Tribal leaders emphasize sovereignty: under Federal Law, tribes have the right to regulate gaming on their lands, and court decisions have upheld those rights against encroachment. They argue that if the CFTC federally authorizes sports event betting, it effectively allows non-tribal entities to take bets nationwide, infringing on the exclusivity many tribes were promised. Moreover, tribes contend this could violate the spirit (if not the letter) of their compacts; for instance, if a state promised a tribe exclusivity in exchange for revenue share, but then a third-party exchange outside state control operates, the tribe loses out. Some tribal representatives have hinted that if prediction markets proliferate, tribes might seek legal recourse or demand that compacts be revisited to compensate for the lost exclusivity.
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