Indian Gaming and Prediction Markets: On a Collision Course?

Globally, monthly trading volume on certain major platforms has risen from underneath $5 billion in September of 2025 to about $24 billion as of April 2026. One analyst has lately predicted that complete buying and selling quantity might attain $1 trillion per yr in 2030. (Whether one of many platforms will let him purchase an occasion contract on that final result stays to be seen.)

The fast progress of those platforms poses a probably disruptive problem to the Tribal gaming business. Because Tribal governments usually have narrower tax bases than state and native governments attributable to belief land standing, jurisdictional limits and financial circumstances, many Tribes rely closely on gaming revenues to fund authorities companies and actions. Gaming merchandise, or merchandise that bear similarities to gaming merchandise, that divert gaming exercise and regulatory authority away from Tribes can have an effect on each Tribal economies and Tribal sovereignty.

Origin and Purpose of Indian Gaming
In 1987, in California v. Cabazon Band of Mission Indians, the U.S. Supreme Court held that as a result of California’s gaming legal guidelines had been regulatory slightly than felony in nature, the regulation of gaming exercise fell outdoors the state’s restricted jurisdiction in Indian Country, and the state might due to this fact not implement its gaming laws in opposition to Tribal gaming operations on Indian lands. 480 U.S. 202. This determination strengthened the precept that Tribes retain sovereign authority over gaming on their lands, and it acknowledged the numerous federal and Tribal pursuits in selling robust Tribal economies and self-government.

In response to Cabazon, Congress enacted the Indian Gaming Regulatory Act (IGRA) in 1988 to create a complete framework for gaming on Indian lands. Under IGRA, sure forms of gaming (like conventional or ceremonial Indian gaming, social gaming with minimal prizes or bingo video games) could be provided and controlled by Tribes with out state interference. Other forms of gaming, dubbed “Class III” gaming, together with casino-style video games like slot machines, card video games and roulette, but additionally together with sports activities wagering, could be carried out by Tribes on their lands provided that the Tribe has entered into an settlement (referred to as a “compact”) with the state wherein the Tribe is situated. IGRA represents a “delicate balance [of] sovereignty” the place Tribes retain regulatory authority over gaming and the financial advantages related to it, states obtain a job in negotiating compacts for sure types of gaming, and the federal authorities gives oversight via the National Indian Gaming Commission and the U.S. Department of the Interior. See Pauma Band of Luiseno Mission Indians v. California, 813 F.3d 1155, 1160 (ninth Cir. 2015) (“Congress attempted to strike a delicate balance between the sovereignty of states and federally recognized Native American tribes.”) The specific functions of IGRA are (amongst different issues) “to promote tribal economic development, self-sufficiency, and strong tribal governments” and “ensure that tribes are the primary beneficiaries of gaming revenues.” 25 U.S.C. § 2702.

Economic Benefits of Indian Gaming
As supposed, Indian gaming underneath IGRA has fostered Tribal financial growth. Since the 1990 census, two years after the enactment of IGRA, the real income per person of the typical Native citizen dwelling on an American Indian reservation has grown by 63%. The most up-to-date report by the National Indian Gaming Commission (NIGC) discovered that Gross Gaming Revenue on Tribal lands was $43.9 billion in 2024. NIGC Acting Chairwoman Sharon Avery acknowledged that the report “reflects … the dedication of tribal leadership in preserving and growing this important economic driver for their communities,” and “the continued success of Indian gaming is a testament to the strong tribal governance and sound regulation that protects the integrity of the industry.”

Tribal gaming is vital to the financial well being of Tribal communities. It increases employment opportunities in sectors reminiscent of tourism and leisure, contributes funds to education and welfare programs, and facilitates investments in constructed infrastructure and web entry. A 2019 research discovered that members of Tribes who develop up in a county with a on line casino are about 4 proportion factors extra more likely to have a highschool diploma and about 5.7 proportion factors extra more likely to have an affiliate’s diploma. Over the final 30 years, coinciding with the event of Indian gaming, high school graduation rates on Tribal lands have increased by virtually 40% and minor crime charges amongst 16- and 17-year-olds have decreased by 22%.

Competitive Threats to Indian Gaming
Prediction market platforms should not the primary aggressive menace to Tribal gaming. In 2018, the Supreme Court, in Murphy v. NCAA, held that the Professional and Amateur Sports Protection Act (PASPA), which prohibited state-sanctioned sports activities playing, violated the anticommandeering doctrine underneath the tenth Amendment. 584 U.S. 453. The Murphy determination eradicated the federal ban on sports activities playing, and opened the door to state-authorized sports activities wagering, and sports activities betting has since expanded quickly throughout the nation. As of 2025, 38 states permitted sports betting and 30 allowed bets to be positioned by cell phone.

Tribal participation in sports activities betting is advanced and uneven. Because Class III gaming stays ruled by IGRA and Tribal-state compacts, whether or not a selected Tribe is ready to provide sports activities betting is determined by the state wherein the Tribe is situated, and the phrases of the Tribe’s gaming compact with the state. Since sports activities betting is now provided remotely, via cellular apps and web sites, and never simply in bodily casinos, competitors for bettors is now not constrained by geography. Interior laws acknowledge that compacts could tackle statewide distant wagering or web gaming, as long as the compact provisions are instantly associated to gaming exercise on Indian lands and protect Tribal regulatory authority. In a market that’s now not tied to the on line casino ground, sports activities betting could threaten Indian gaming by diverting prospects from bodily casinos; however, some Tribes, such because the Seminole Tribe of Florida (who personal and function the Hard Rock model of lodges and casinos) have begun providing distant sportsbooks of their very own to customers situated outdoors of the Tribe’s lands.

Even for Tribes which might be in a position to provide sports activities betting, competitors from non-Tribal sports-betting operators additionally poses a menace to Tribal financial growth the place states authorize these non-Tribal sportsbooks to function in the identical market as Tribal casinos. For instance, in 2021, the Arizona Department of Gaming adopted guidelines permitting as much as 20 occasion wagering licenses within the state, reserving half for Tribes and half for homeowners of Arizona skilled sports activities groups or franchises.

Prediction Markets because the Latest Threat
Prediction markets current the most recent menace to Tribal gaming as a result of they provide betting-like merchandise outdoors of the framework not solely of IGRA, however of different gaming legal guidelines and laws altogether. The Commodity Futures Trading Commission (CFTC), acknowledging the latest progress in occasion contracts listed by CFTC-registered entities, has proposed a new regulatory framework for evaluating whether or not sure occasion contracts contain gaming (amongst different listed forms of actions), thereby permitting the CFTC to ban these contracts from being provided. The impression of such a regulation, if adopted, is unsure, since not all prediction market platforms are registered with (or regulated by) the CFTC.

Because prediction market platforms provide merchandise that operate equally to sports activities bets and other forms of gaming with out being topic to IGRA or state gaming compact that govern Tribal sports activities wagering, some Tribes are claiming that prediction markets undermine Tribal financial growth, self-sufficiency and self-governance. For occasion, California Tribes contend that Kalshi’s exercise “directly interferes” with their capacity to control themselves underneath Tribal regulation and impairs their sovereign proper to manage gaming on reservations. In impact, they argue, sports activities occasion contracts draw enterprise away from Tribal casinos by permitting patrons to take part in Class III gaming from dwelling, inflicting income losses that imperil Tribal authorities capabilities and companies. These lawsuits are ongoing.

Conclusion
IGRA was enacted to protect Tribal regulatory authority and guarantee Tribes stay the beneficiaries of gaming on Indian lands. Kevin Washburn, a regulation professor on the University of California, Berkeley, and former Assistant Secretary for Indian Affairs on the U.S. Department of the Interior, has noted that, “Congress specifically intended the federal government and Tribes to regulate gaming activities on Indian lands.” Prediction markets current a brand new take a look at—for regulators and courts—of how federal insurance policies supporting Indian gaming, Tribal self-determination and financial growth applies in a quickly evolving aggressive and technological panorama.

The authors want to thank summer time regulation clerks Ashwin Bhat and Gabrielle Ladun for his or her contributions to this alert.