An alliance between commercial casinos and tribal gaming groups is taking shape as sports predictions pull sports betting away from the framework that has historically governed it.
In a joint letter to Congress this week, the American Gaming Association and the Indian Gaming Association urged lawmakers to intervene against sports event contracts offered through prediction markets, which they described as unregulated sports betting operating under federal commodities law rather than state gaming statutes or tribal compacts.
While the AGA represents both commercial and tribal casino interests, the IGA exists specifically to protect tribal sovereignty and compact-based gaming rights. The two organizations frequently advocate separately and have often landed on opposite sides of gambling expansion, including California’s 2022 sports betting ballot fight and compact disputes in Florida and Oklahoma.
Sports predictions ‘threaten’ integrity
Sports prediction markets pose an immediate threat to the integrity of regulated gaming, the groups argue, as they allow sports wagering to operate outside the state and tribal systems designed to enforce consumer protections, responsible gaming standards, and market integrity.
Both trade groups urged Congress to use forthcoming crypto market structure legislation to clarify that sports event contracts fall outside the scope of federal commodities law when they function as wagers on athletic contests.
Roughly 90% of Kalshi’s approximately $23 billion in trading volume since September has come from sports. This past weekend’s NFL Wild Card game between the Bears and Packers generated $112 million in volume alone, ranking No. 5 all-time among the platform’s most-traded markets.
Kalshi has also moved to self-certify contracts tied to college transfer decisions, one of many categories of wagering explicitly prohibited by state laws and tribal compacts.
CFTC’s ‘inaction’ led to sports predictions
The letter attributes that expansion to “exploiting regulatory inaction by the Commodity Futures Trading Commission,” allowing prediction markets to bypass safeguards required of licensed sportsbooks, including age restrictions, licensing standards, responsible gaming programs, anti-money-laundering controls, and integrity monitoring.
That concern now extends to two of the largest commercial online betting operators, as DraftKings and FanDuel each launched sports event contract last month, without the same safeguards on their sportsbooks, a shift that prompted both to leave the AGA.
The trade groups agued that prediction markets also unfairly avoid the licensing fees, taxes, and regulatory oversight that fund enforcement and consumer protections at the state and tribal level, echoing arguments made by states and tribes in more than a dozen lawsuits filed or threatened in Nevada, Tennessee, New Jersey, and Maryland.
“We firmly believe that congressional consideration of cryptocurrency market structure legislation provides an important, bipartisan opportunity to prevent sports betting and casino gambling under the guise of ‘event contracts,’” the letter said.
Tribes and commercial casinos at odds
Tribal governments and commercial gaming operators have long clashed over how gambling should expand and who should control it, a tension that dates back decades to early fights over tribal exclusivity, state compacts, and the boundaries of federal oversight.
Those divisions sharpened as commercial casinos expanded beyond Las Vegas and Atlantic City and tribes fought to protect gaming rights secured under the Indian Gaming Regulatory Act, often finding themselves on opposite sides of state negotiations, court battles, and ballot initiatives.
More recently, tensions have surfaced in compact disputes involving the Seminole Tribe of Florida, in litigation tied to tribal gaming agreements in Oklahoma, and most visibly in California’s $400 million sports betting ballot fight in 2022, the most expensive ballot campaign in U.S. history.
At times, the two sides have moved toward cooperation when facing perceived unregulated threats, including sweepstakes-style gaming platforms. The current alignment against prediction markets follows that pattern, but on a national scale and with federal jurisdiction at stake.
California talks stall as incentives shift
After California voters rejected two competing sports betting ballot measures in 2022, tribes and major sportsbook operators quietly revisited whether a negotiated path forward was still possible.
In April 2025, tribal leaders met with representatives from DraftKings, FanDuel, BetMGM, and Fanatics to discuss a sports betting framework that would keep market ownership and control with tribes, while allowing commercial operators to provide technology and platforms in exchange for a set revenue share and minimum guarantees.
Those talks have since gone quiet. People familiar with the discussions say no meaningful progress has been made in recent months, a slowdown that has coincided with DraftKings and FanDuel pivoting toward prediction markets.
Sports predictions expand unchecked
Federal oversight of prediction markets has remained limited, with the CFTC allowing Kalshi, Polymarket, and Crypto.com to expand sports event contracts largely through self-certification amid staffing and funding constraints. That approach has drawn criticism from professional sports leagues and lawmakers as well.
During a December House Committee hearing tied to CFTC reauthorization, several members questioned whether sports contracts belong under federal commodities law and whether the agency has the capacity to oversee markets that increasingly resemble sports betting. Recently confirmed CFTC Chairman Michael Selig has indicated he does not believe the agency is the proper arbiter of that decision.
The AGA and IGA framed congressional action as the only remaining path to address the issue before courts and regulators reshape sports betting by default.
“These contracts are being offered in flagrant disregard of state laws, tribal sovereignty, the Commodity Exchange Act, and CFTC regulations,” the groups wrote, warning that prediction markets “mislead consumers into believing that a sports bet is an investment” while forcing states and tribes to spend heavily defending their authority.
