Tribal representatives have urged Congress to ensure the protection of both state and tribal gaming authority. They contend that contracts for sports events function similarly to bets but lack the necessary regulatory protections.
During a roundtable discussion on August 4 held by the Senate Indian Affairs Committee, tribal gaming leaders expressed concerns over sports prediction markets. They argue that these platforms exploit federal commodities law to offer products resembling nationwide sports betting while evading the Indian Gaming Regulatory Act (IGRA) and tribal-state agreements.
Tribal representatives highlighted that sports contracts directly compete with regulated gaming, yet they are not subjected to the same licensing, responsible gaming, and revenue-sharing requirements.
Operators of prediction markets maintain that their offerings, including sports event contracts, are classified as financial derivatives under the Commodity Exchange Act (CEA). They assert that the Commodity Futures Trading Commission (CFTC) holds exclusive jurisdiction over their activities.
However, tribes and an increasing number of states argue that these sports event contracts are essentially illegal sports wagers, irrespective of the terminology employed.
Senate Indian Affairs Committee Vice Chairman Brian Schatz supported this viewpoint, pointing out that consumers can place bets on the Philadelphia 76ers winning the NBA championship through either a sportsbook or a prediction-market application. “The consumer experience is exactly the same,” Schatz remarked, describing these products as circumventing both federal gaming laws and the Indian Gaming Regulatory Act.
Jamie Hummingbird, chairman of the National Tribal Gaming Commissioners & Regulators, emphasized that merely labeling a wager as a financial product does not alter its fundamental nature. He noted that DraftKings and FanDuel’s decision to abandon their Nevada licensing efforts in favor of prediction markets is indicative of sportsbooks viewing these markets as a means to bypass gaming regulations.
Tehassi Hill, vice chairman of the Indian Gaming Association (IGA) and chairman of the Oneida Nation, asserted that prediction markets provide many of the same betting options available through sportsbooks, including money lines, totals, parlays, and player props. “They claim to be innovators, but they have invented nothing,” Hill stated.
Hill also pointed out that tribes invest over $450 million annually and employ more than 6,000 individuals to manage licensing, age verification, audits, responsible gaming, and game integrity.
Mark Macarro, President of the National Congress of American Indians, criticized prediction markets for attempting to utilize commodities law to evade the framework established by Congress through IGRA. “Nothing in the legislative history of the CEA indicates that Congress intended for the CFTC to act as a backdoor regulator of gaming,” Macarro stated.
Macarro referenced comments made by former Senator Blanche Lincoln during the 2010 Dodd-Frank debate, warning that event contracts could emerge around major events like the Super Bowl or the Kentucky Derby without serving a legitimate commercial purpose. He also noted that former Senator Christopher Dodd, one of the law's authors, recently echoed similar sentiments against the CFTC’s proposed prediction-market rule. A coalition of 44 state attorneys general has also urged the CFTC to retract the proposal, arguing it would improperly undermine state gambling laws. “The CFTC is not a gaming regulator,” Hummingbird concluded.