The federal regulator of prediction markets has opened the door to even more participation in the event contract business, and one Native American tribe in Louisiana already plans to take advantage of the opportunity in what may prove a controversial move.
- CFTC staff issued a no-action letter allowing certain “passive software providers” to submit prediction-market orders without registering as introducing brokers.
- The framework could enable prediction markets to be embedded into additional consumer apps, websites, wallets, and other platforms, potentially expanding access to sports and other event contracts.
- The announcement was quickly followed by a first: a Native American tribe announcing a prediction markets app in partnership with Kalshi.
Staff at the Commodity Futures Trading Commission (CFTC) issued a “no-action” letter on Thursday, which the regulator said was “for the benefit of providers of passive software.”
The bottom-line is that the letter could legitimize or open up some new and interesting avenues for people to trade via prediction markets. For example, a software provider could create a consumer-facing app or website that allows a user to submit orders for sports or election-related event contracts.
The casino-operating Tunica-Biloxi Tribe of Louisiana evidently agrees with this interpretation, as it announced on Friday that it plans to launch a prediction market app "powered" by Kalshi.
The move is a first for Native American tribes in the U.S., several of which are opposing sports prediction markets in court.
“Through SaltTrade Derivatives, a new Tribally-owned venture developed in partnership with Kalshi, we intend to participate and help shape this emerging industry as owners and innovators,” said Marshall Pierite, chairman and CEO of the tribe, in a press release explaining the move.
The Tunica-Biloxi Tribe of Louisiana is getting into prediction markets via a partnership with Kalshi:
— Geoff Zochodne (@GeoffZochodne) September 18, 2026
"By entering this market as an owner of a prediction markets app, the Tunica-Biloxi Tribe is exercising its sovereignty..." pic.twitter.com/mDcibmKgUw
While it's a first for both Native American tribes and the prediction market industry, it’s bound to cause a stir.
Several tribes with casinos are convinced that prediction markets, which allow users to buy and sell "yes" or "no" contracts tied to sporting events, are a threat to their business and sovereignty.
There have also been accusations of "divide-and-conquer" tactics being used before in fights over the legality of sweepstakes casinos and authorizing online sports betting in California.
Yet Tunica-Biloxi’s decision follows the release of the CFTC no-action letter, which includes a footnote specifying that some software providers may be affiliated with state or tribal governments and must therefore waive sovereign immunity from CFTC oversight.
A controversial 'first'
It also follows a meeting earlier this week between tribal leaders and CFTC Chair Michael Selig, during which concerns were raised about sports and election contracts offered by prediction markets for trading.
“The inter-tribal message is clear: the CFTC cannot treat sports-event prediction contracts as ordinary financial products when they function as wagering, directly affecting Indian gaming, and potentially eroding the compact-based framework Congress established through (the Indian Gaming Regulatory Act),” a press release from the Oklahoma Indian Gaming Association said.
So the Tunica-Biloxi Tribe’s decision is going to be controversial in some circles.
Pierite acknowledged their decision “will generate discussion and debate,” but said they’d not seen any evidence of prediction markets cannibalizing tribal gaming revenue and that “tribal sovereignty” means tribes get to decide what's best for them. Among other things, the Tunica-Biloxi Tribe already operates the Paragon Casino Resort in Marksville, La.
“Further, we expect some tribes, particularly those with established, high-revenue gaming operations, will say the Tribe is ‘selling out’ Tribal gaming or that this is bad for Indian Country,” Pierite said. “But that reaction often comes from a position of strength that not every tribe shares. For tribes without the same access to lucrative gaming markets or major metropolitan populations, prediction markets represent a new and meaningful source of revenue.”
For Kalshi, the Tunica-Biloxi partnership is a clear win-win situation.
“Indian Country should have more paths to economic self-determination, not fewer and we're proud to partner with the Tunica-Biloxi Tribe as the first tribal nation to enter prediction markets,” Kalshi CEO Tarek Mansour said in a press release. “The debate can no longer be reduced to prediction markets on one side and Tribes on the other. What’s clear is that regulated national infrastructure and Tribal entrepreneurship can develop together — and one does not have to lose for the other to win.”
CFTC Chair Michael Selig met yesterday with groups representing Native American tribes. In short, their message was that the CFTC "cannot treat sports-event prediction contracts as ordinary financial products when they function as wagering, directly affecting Indian gaming..." pic.twitter.com/w3m3odjSRB
— Geoff Zochodne (@GeoffZochodne) September 15, 2026
Under the CFTC’s new no-action letter, the Tunica-Biloxi app could be one of many still to come.
An example of the CFTC staff philosophy already in action is Phantom, a wallet app that previously received a no-action letter. ProphetX also has an arrangement with bet-tracking app Pikkit that allows the latter to "connect its users directly to ProphetX's prediction market exchange."
Thursday's letter could indeed apply pretty widely, according to Braden Perry, a former CFTC senior trial lawyer and current regulatory attorney at Kennyhertz Perry.
"It's not limited to crypto, and it specifically names event contracts," Perry said. "Any consumer app with an audience could add a trading window."
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Apps and certs
While historically someone who solicits or accepts orders for event contracts must be registered as an "introducing broker" with the CFTC, the letter says staff will not recommend enforcement actions against passive software providers, or PSPs, for doing so without that registration.
"SaltTrade Derivatives will not be registered with the CFTC, in reliance on conditional no-action relief issued by the staff of the CFTC," Kalshi noted on Friday.
.@CFTC Staff Issues No-Action Position to Providers of Passive Software: https://t.co/irgUh9JejX
— CFTC (@CFTC) September 17, 2026
The no-action letter is in lieu of future CFTC rules or guidance. And there are conditions that must be followed for the waiver, such as abiding by certain advertising and onboarding rules. Still, the PSPs would have a fair amount of registration-less leeway.
They could, for example, “develop and distribute front-end interface software for Users to review market data and aggregate position information, view information about product offerings, and submit orders for Commission-regulated derivative products directly to Registrants.”
Those products could include “event contracts,” the letter says. In other words, a PSP could have software that lets someone view the pricing and volume of contracts tied to a football game, then submit an order to buy a “yes” or “no” contract on that game via a prediction market.
Terms and conditions may apply
But that’s where the federally regulated exchange would then step in. Users would also remain free to just go directly to the exchange to place their orders there.
“The PSP’s involvement in order submission will be limited to providing software on the User’s device, which enables the User to transmit its orders directly to Registrants,” the letter says. “The PSP will not have any affirmative involvement with any particular orders.”
Other "covered activities" for the PSP waiver include revenue-sharing agreements with prediction market operators, promoting contracts, and offering either "standalone" consumer interfaces or ones that are "embedded" in existing wallet software.
That said, the PSP users would have to be signed up with a prediction market or their broker partner. The PSP would not have custody of money or positions.
“The PSP’s software would serve only to passively enable Users to transact in Commission-regulated derivatives products,” the letter says. “At no point would the PSP hold, control, or take into custody User assets, generate express ‘buy’ or ‘sell’ signals, or exercise discretion with respect to the routing or execution of User orders.”
Perry noted that the "real change" has to do with money.
"Previously, the software firms had to stay neutral and disallowed fees tied to trading," he said. "Now the app can pick one exchange, promote it, take a revenue share, and charge users per trade. But the app and its exchange partner have to sign an undertaking making each liable for the other's violations. Exchanges are being asked to put their license behind someone else's app. This is a liability issue that will likely reach courts sooner than later."
