Tribes Line Up to Criticize Tunica-Biloxi Prediction Market Move

Native American tribes are venting their frustrations with the Tunica-Biloxi Tribe following their decision to launch a prediction market app.

Tunica-Biloxi entered the prediction market industry this week with a Kalshi-powered app – the first offered by a Tribal nation.

The new prediction app is being launched through the tribe’s business subdivision, SaltTrade Derivatives. However, it will be powered by Kalshi, one of the giants in prediction markets right now.

That hasn’t stopped complaints from other tribes with gaming interests. The California Nations Indian Gaming Association called the move a “profoundly disappoint decision”.

Cal Tribes: ‘Tunica-Biloxi Should Know What’s at Stake’

The California Nations Indian Gaming Association (CNIGA) was quick to criticize the move. It called the move “profoundly disappointing”, especially so close to a court ruling on the legality of prediction platforms on Tribal soil.

It cited the recent ruling by the Ninth Circuit (Blue Lake Rancheria vs Kalshi) to classify sports prediction contracts as “unauthorized” Class III gaming under the terms of the Indian Gaming Regulatory Act (IGRA).

The ruling means that tribes can now actively block prediction markets like Kalshi and Polymarket operating on tribal land.

In a press release, the CNIGA said that the Ninth Circuit court “made it clear” that “entering into these [sports] contracts on Tribal lands violates the law.”

Other tribes, the CNIGA said, are fighting to protect their tribal casino businesses from federally regulated prediction exchanges. The Tunica-Biloxi “chose to stand” with Kalshi by launching its new app, they added.

Indian Gaming Regulatory Act (IGRA) of 1988: The Key Rules

The IGRA sets rules for Native American communities to regulate and provide casino gaming, sports betting, and iGaming to anyone on their land.

• Class I: Traditional or social games.
• Class II: Bingo, group card games, pulltabs.
• Class III: Slots, table games (e.g. roulette, blackjack), sports betting, all agreed through a tribal compact with the state.
• Revenue Use: Profits to fund tribal government operations, economic development, and welfare programs.

Concerns ‘Bigger Than One Tribe’

Weighing in on LinkedIn, Jeff L. Grubbe of the Agua Caliente Band of Cahuilla Indians warned about the “consequences across Indian Country” of the Tunica-Biloxi move.

“My concern with prediction markets is bigger than any one company or Tribe,” he said. “If sports wagering can be reclassified as a financial product and used to circumvent IGRA, Tribal-State compacts, and Tribal gaming regulation, it threatens protections Tribes have fought decades to secure.

“Shame on Kalshi for their desperation.”

Louisiana Still Fighting Prediction Markets

In Louisiana, where the Tunica-Biloxi Tribe is based, there has been a tentative battle going on against the prediction markets.

Gaming regulators warned in December that sports event contracts constituted sports betting under current state law.

Meanwhile, along the Mississippi, there are other fights going on.

Mississippi is still dragging its heels over expanding its legal sports betting industry. Sports betting was legalized in the state in 2018. However, thus far, betting is only permitted at retail sportsbooks.

Mobile and online apps are prohibited, with state lawmakers failing for a third time to pass legislation earlier this year.

There is bound to be a clash in the future, as sports event contracts at prediction market exchanges are available in MS on mobiles, where regulated sports betting is not.

Lieutenant Governor Delbert Hosemann said in July that mobile sports betting “wouldn’t create a single job” for Mississippians. However, with prediction markets growing in popularity, that stance could change when the session resumes in January.

Supreme Court Showdown Looms

The Ninth Circuit ruling was another blow to tribes who are pleading tribal sovereignty over gambling. Plus, the stance directly flew in the face of an earlier Third Circuit ruling that said the Commodity Futures Trading Commission (CFTC) has exclusive regulatory powers over exchanges.

However, there is a precedent this year, following a win for Nevada in the Ninth Circuit Court of Appeals in August.

The likelihood of a U.S. Supreme Court ruling to sort this out looks high. Until then, prediction market exchanges will be pressured into geofencing not only states, but tribal lands too. The fight over how and where sports contracts can be offered rumbles on.