SAN JUAN, Puerto Rico - Native American gaming groups are joining much of the commercial gaming industry in fighting back against what they consider illegal betting offered by prediction markets, framing the markets’ sports event contracts as an infringement on federally recognized tribal sovereignty and a threat to their communities.
- Tribal gaming leaders warn that prediction markets threaten tribal sovereignty and casino revenues.
- States and tribes argue sports event contracts violate gambling laws despite the markets claiming federal protection.
- Legal battles grow as tribes push IGRA-based challenges and view prediction markets as a major long-term threat.
Online prediction market sports event contracts are available in all U.S. states and territories as well as within hundreds of sovereign tribal territories. Tribal stakeholders are arguing both in and out of court that these offerings, which allow users to buy and sell “yes” and “no” contracts based on the outcome of sporting events, constitute illegal gambling in violation of state and federal law.
Speaking at a gaming industry conference in Puerto Rico on Thursday, a panel of tribal gaming leaders framed sports event contracts as a growing danger to the tens of millions of dollars tribal-backed sportsbooks have brought to their communities as well as state and local governments. Rodney Butler, chair of the Connecticut-based Mashantucket Pequot Tribal Nation, said these platforms also pose a threat to the country's hundreds of Native American brick-and-mortar casinos - and their billions of dollars in annual revenue.
“These (prediction markets) are going around and putting at risk the $100 million a year that the state is getting from sports betting and iGaming,” Butler said during Thursday’s National Council of Legislators from Gaming States (NCLGS) meeting, “and actually, in fact, putting at risk of the billions that the state has received (from casino gaming) over the years, because technically that violates your excluded agreements as well.”
Prediction market background
Prediction markets, Kalshi and Polymarket chief among them, invested heavily around the 2024 U.S. presidential election, promoting their platforms, which allow users to trade outcome-based contracts on thousands of topics, including politics, including awards shows, pop culture, and a host of other areas. In 2025, several of these sites offered contracts on the Super Bowl in February, eventually expanding to similar offerings for dozens of foreign and domestic sports leagues.
This drew the ire from regulated sportsbooks as well as their regulators in multiple legal sports betting states. Regulatory bodies and the leading prediction markets are locked in more than a dozen legal battles in states on both coasts; both sides believe a final resolution on their legality won’t be reached for several years, likely by the Supreme Court.
In the meantime, several major online-focused sports betting operators have entered the prediction market fray. Fanatics offers prediction markets in roughly two dozen states, while FanDuel and DraftKings, the two U.S. sports betting market share revenue leaders, are expected to follow suit in the coming months.
Prediction markets' legal argument that they are regulated by the federal government, and not subject to state gaming laws, doesn't stand up against tribal gaming, which is also regulated by federal law, Matt Morgan, Oklahoma Indian Gaming Association Chair, said during NCLGS
— Ryan Butler (@ButlerBets) December 11, 2025
They will join other existing prediction markets, including Kalshi, Polymarket, Robinhood, and Crypto.com. Underdog, which started as a daily fantasy pick’em site, has announced plans to close its North Carolina online real money sportsbook shortly after it forfeited its Missouri sports betting license as it further embraces its own prediction market platform.
Sportsbook companies offering prediction markets have so far only announced plans to accept sports event contracts in states where they don’t offer real-money sports betting. But this still hasn’t stopped growing pressure from state government and the regulated gaming industry at large.
Multiple states have warned sportsbook licensees that they view sports event contracts as illegal gambling and that books could risk licensure even if they launched prediction markets in other states. The American Gaming Association, the regulated industry’s leading advocacy group, has pushed back against prediction markets as well.
In response, FanDuel, DraftKings, and Fanatics left the AGA.
Not willing to jeopardize their lucrative brick-and-mortar casino business, other major gaming operators with mobile sportsbooks including MGM and Caesars have steered clear of prediction markets. But for the digital-focused operators, the opportunity to reach millions of users in states with limited or no legal mobile sportsbooks - plus the opportunity cost of falling behind companies with no gambling licenses such as Kalshi - has proved too much to pass up.
Tribal response
Prediction markets have argued in court that sports event contracts are a form of commodities trading, not betting, and that they are exclusively subject to federal regulations, not state gambling laws. Tribal leaders argue that position carries no weight against tribal gaming, which is regulated at the federal level.
The federal Indian Gaming Regulatory Act (IGRA) of 1988 creates the legal framework that oversees the hundreds of tribes and their gambling offerings. It also gives the tribes exclusive rights to gambling on federally recognized, sovereign tribal lands.
This provision, tribal leaders argue, makes mobile sports event contracts placed on tribal lands a violation of federal law.
Tribes have pushed this position in court, led by California, the nation’s largest Native American gaming market. Three California tribes have already sued several leading prediction markets for violating IGRA, while others have supported tangential lawsuits in other states.
As the courts deliberate, tribes will continue to view prediction markets as a significant threat and will aggressively look to counter them, said Daniel Little, chief intergovernmental affairs officer of the California-based Yuhaaviatam of San Manuel Nation. Little told NCLGS attendees Thursday that prediction markets were a “big, serious issue,” that remains the latest in a long history of threats to the $44-billion-a-year tribal gaming industry, and by extension, the well-being of tribal nations and the communities they serve.
“Anytime tribes have had something valuable,” Little said, “someone has been there trying to take it.”
