Tribes spent 40 years trying to establish casinos on their reservations, looking for financial prosperity. Those 40 years included fights with the U.S. government. Meanwhile, the companies behind prediction markets, which include sports betting, have not faced the same opposition from the feds. KNPR’s Jimmy Romo has more:
October is a big month for sports. There’s baseball and the World Series; college and professional football are in full swing, as well as the start of the season for men’s professional hockey and basketball. With so much action on the field, sportsbooks are busy accepting parlays and over/under bets.
To wager, sportsbooks require sports bettors to physically prove they are over the legal age, depending on the jurisdiction, as required by state regulations. But the ever-growing prediction market space, led by companies like Kalshi and Polymarket, allows users to place bets in an app with little to no oversight, and with blurred jurisdictional lines.
“It's just illegal unregulated online sports betting”
That’s what David Z. Bean, an enrolled member of the Puyallup Tribe of Indians and the Chairman of the Indian Gaming Association, or IGA, feels about prediction markets offering sports wagering.
The IGA and other tribal gaming leaders have worked with attorneys general nationwide to combat illegal sports betting.
And since there is no age verification on these apps, it puts the youth at risk of gambling away hundreds of dollars in a single wager.
“They've been catering to kids. They don't have responsible gambling programs and they've totally ignored tribal law and state law tribal regs and state regs and they feel like they're not subject to it.”
Kalshi, Polymarket, and the like have acquired hundreds of thousands of users, driving big revenue growth, especially with high-stakes bets. As of June, Polymarket hit roughly $1 billion in revenue, according to data from the research firm Sacra.
But states like Nevada, Michigan, and Washington are trying to pump the brakes on prediction-market sports wagering by banning it. The 6th and 9th Circuit Courts of Appeals have ruled in favor of the states.
Several states are now suing to ban prediction market companies, since no federal regulations exist.
Prediction market companies have seen explosive growth on Wall Street, starting with a monthly trading volume of $5 billion. That figure grew to roughly 24 billion dollars in April, according to the Block digital asset information service.
That wealth concerns many in the tribal gaming space, including Holly Cook Macarro, an enrolled citizen of the Red Lake Band of Chippewa Indians and a political consultant for tribal policy advocacy.
She and the IGA have seen prediction market companies spend a lot of money on PACs to achieve favorable political outcomes.
“I feel confident that the prediction markets, given their current investments in candidates and the role that they're playing in their investments in super PACs and independent expenditures around the country, when they fail in the courts, they are going to seek legislation to enable them to continue making these offerings.”
Tribal gaming experts' concerns include who is connected in prediction markets.
“You look at who's involved in these prediction market companies and who the strategic political advisor is to the Polymarket and Kalshis of the world, and it's a family member of the president.”
That family member is the president’s son, Donald Trump Jr., a Polymarket advisor and major investor through the firm 1789 Capital, of which he is a partner. He also has ties to Kalshi, where he holds an equity stake and serves as an advisor.
“The federal agencies didn't want to take action because guess what? They piss off the boss. They get fired. That's exactly what we've been dealing with for the last 20 months.”
It wasn’t until the start of the summer that tribes and their gaming associations started visiting Washington, D.C. in droves to talk with lawmakers and attorneys general. These efforts didn’t go unnoticed. Jason Giles, a citizen of the Muscogee (Creek) Nation and IGA’s executive director, sees lawmakers' eyes opening to the issue.
Texas Republican Senator Ted Cruz has announced that after the midterm elections, he’ll introduce a bill giving states the authority to allow or ban prediction market companies.
“[The] Senate and the House are sort of late to the battle on this. But I'm not afraid, I know people want to do the doom and gloom and they're too big to fail and they're a big part of the economy now. That's like saying the mafia was a big part of the economy in Brooklyn back in the day. You stop it because it's illegal.”
Polymarket and Kalshi have suffered serious losses in courts nationwide, as 44 attorneys general have joined a coalition against prediction-market sports wagering. Seeking wins, they’ve offered to work with tribes interested in having prediction markets on their reservations.
According to Bean, the cost is their tribal sovereignty.
“I don't know who in their right mind would waive tribal sovereignty to engage in an illegal activity. And so I think they're hoping that there are some folks who are looking for that dollar as opposed to holding up tribal sovereignty.”
But so far, four tribes have decided to work with Kashi, a move that undermines the 40 years tribes worked to get tribal gaming on their reservations.
“It was a slap in the face to everything that Indian country has built and how we placed a priority on making sure that they cannot continue. The impacts are going to be felt in the corners that need it most.
The Supreme Court has yet to schedule a hearing on allowing states to regulate prediction market sports wagering.
