Tribes go to war
Multiple groups representing US tribal gaming interests have joined forces against Contract for Difference’s (CFD) offered by prediction and event market operators, such as Kalshi and Robinhood.
CFDs threaten tribal gaming rights
On Thursday, reports emerged the powerful Indian Gaming Association has added its weight to the dispute that CFDs threaten tribal gaming rights.
Fueled by recent political moves favoring the vertical, brand awareness of CFDs has skyrocketed since the Presidential election, and Super Bowl LIV.
The tribes’ unified condemnation, however, spells legal battles ahead for the futures market.
Not alone
The IGA represents over 180 tribes. It has joined multiple other tribal bodies in writing letters to the Commodity Futures Trading Commission (CFTC) from February 10-22, to state CFDs are an “illegal circumvention of state gambling laws.”
All the various tribal bodies sent memos to the CFTC as part of the federal body’s 45-day public comment period on CFDs. In late March, the CFTC will host an in-person roundtable in Washington, DC “to determine agency policy,” according to Sportico.
The IGA stated that allowing “Sports Contracts to be listed and traded will interfere with the sovereign right of tribes and states.” The IGA said CFDs would encroach on tribes’ exercising: “their police power to regulate gaming within their respective territories – a right long recognized by courts throughout the United States.”
CFDs “would destroy the value of tribal gaming compacts”
Tribes further argue that CFDs “would destroy the value of tribal gaming compacts” with US states and affect their sports betting revenue.
The emergence of tribal opposition comes in a week in which Congresswoman Dinah Titus slammed CFDs as contrary to state gaming regulations, and the American Gaming Association expressed “very strong concerns.”
AGA sides with IGA
According to reports, the AGA’s communication to the CFTC states its concerns stem from “recent self-certification of what are essentially sports betting futures, which are currently available to retail customers in all 50 states.”
The AGA says the contracts pose “an unfair economic threat to sportsbook operators” and ushers in a US-wide betting product that undercuts state regulators.
The trade industry group also agrees with IGA, stating: “the availability of these products also tramples on tribal sovereignty.”