Are predictions markets an existential threat to tribal gaming? That’s the conclusion three prominent tribal gaming lawyers came to during a recent session of the Indian Gaming Association’s (IGA) New Normal webinar series late last week. Panelists on the webinar included prominent attorneys Joseph Webster, Bryan Newland and Scott Crowell, all of whom were deeply concerned about the impact predictions markets would, and are, having on their gaming operations.
Of particular concern to the gathered legal minds is the idea that predictions markets are regulated by the Commodities and Futures Trade Commission (CFTC) rather than state authorities. Crowell summed up the mood in the room saying, “Jurisdiction is a key component of this issue for all parties. Prediction markets such as Kalshi have argued that they are federally legal under the CFTC and therefore are preempted from state gaming laws. This has been successful so far – Kalshi has secured preliminary injunctions to operate in Nevada and New Jersey after countersuing both. If you’re keeping score from a litigator point of view, they’re on a roll,”
Crowell went on to suggest what could be an effective attack against predictions markets using that same concept of jurisdiction. In his view, the courts are essentially saying that the Commodities Exchange act that governs predictions markets is superseding state law by allowing what are essentially unlicensed sportsbooks to remain in operation. He thinks that tribal gaming interests, led by the IGA, should be using the Indian Gaming Regulatory Act (IGRA) to make the same argument.
Most observers agree that Crowell’s idea is something of a long-shot, but all seem to agree that desperate times call for desperate measures – and that these are desperate times. As it stands, however, predictions markets are still legal in all 50 state.