Tribal leaders say they don’t know what to expect from upcoming CFTC call

Leaders of US tribes active in gaming will take part in a virtual meeting on Thursday with Caroline Pham, acting chair of the Commodity Futures Trading Commission. The call is expected to centre around sports event contracts on prediction markets. That’s about all that anyone knows so far, including those involved.

The Indian Gaming Association’s Victor Rocha and Jason Giles held another webinar on Wednesday in their New Normal series in anticipation of the call. This week’s guests included tribal attorneys Bradley Bledsoe Downes and Joseph Webster, as well as Rodney Butler, chairman of Connecticut’s Mashantucket Pequot Tribal Nation, one of the biggest and most influential gaming tribes in the US.

The quintet agreed that what they’ll hear on Thursday’s call is almost a complete unknown. Previously, the CFTC had scheduled an all-day event with multiple participants in Washington, DC on 30 April.

Nothing about that meeting, including the date, was ever publicly confirmed. The only thing that was confirmed was the cancellation of the event beforehand, with no explanation offered. News of the new, tribal-only call came as a surprise when it was first reported by InGame earlier this month.

“There hasn’t been much information other than an invitation,” Downes lamented. “I feel like this is at best a courtesy.”

Butler: ‘They’re violating our agreements’

Butler offered comments regarding prediction markets that were noteworthy, given that he is among the most powerful tribal leaders to speak directly on the issue thus far. His tribe and the Mohegan Tribe are compacted with the state of Connecticut for gaming exclusivity.

The two groups have so far given the state billions of dollars in revenue, but those agreements, as well as similar ones in other states, could be in jeopardy if the rise of prediction markets is not curbed.

“It’s really simple: They’re violating our agreements, they’re violating our compacts that we’ve worked very hard for…. It just completely circumvents that government-to-government relationship,” Butler said.

So far, Connecticut has not been among the litany of states that have sent cease-and-desist orders or entered into lawsuits with prediction markets such as Kalshi and Crypto.com. Butler mentioned that the state’s attorney general and Department of Consumer Protection are looking into the matter and “will weigh in” at some point.

“We have a very lucrative agreement for exclusivity in Connecticut, and many tribes have that throughout the country and that will be impacted immediately,” he said.

Tallying the scoreboard

Attorneys Downes and Webster again ran through the current legal proceedings regarding prediction markets. So far, Kalshi in particular is fighting three state lawsuits against Nevada, New Jersey and Maryland.

Kalshi has secured preliminary injunctions in the first two but faces appeals and the Maryland case is still in its early stages. Downes highlighted the Maryland case specifically, saying it was perhaps the most comprehensive argument from litigators and might have been bolstered by lessons learned from rulings in the other states.

In both the Nevada and New Jersey cases, commercial interests have started to join the fray. The Nevada Resort Association has asked to intervene in that state’s appeal and the Casino Association of New Jersey filed an amicus brief in support of its state’s case. This could be an indication that more and more stakeholders are willing to join the fight, panelists said.

Webster, who discussed legal issues during a previous webinar, said again on Wednesday that “there hasn’t been a tribal voice” in these suits, including amicus briefs. He also noted that the state rulings have only been for preliminary injunctive relief.

“There haven’t been full decisions on the merits from any of the courts yet,” he stressed.

Spotlight on the CFTC

Panelists spent time analysing the CFTC on Wednesday, a federal agency perhaps getting more attention than it ever has due to prediction markets. Historically, the commodities and derivatives markets have been niche and largely tied to agriculture. Rocha jokingly referred to the commission as the “orange juice police”.

The idea of the CFTC now becoming a de facto national sports betting regulator is worrisome, including potentially for the commission itself. When the commission was appealing election betting under the Biden administration, it cited a lack of desire to police these new markets. The appeal was dropped this year after President Donald Trump took office.

“I don’t think anyone ever predicted, no pun intended, that there would be sports betting under the guise of prediction markets,” Downes said.

Downes also brought up the self-certification process, through which prediction markets can offer contracts without first securing approval. Rather, the CFTC follows behind and either requests markets be delisted or takes no action. Downes contended that this system is “being abused” by “emboldened” exchanges like Kalshi.

As with numerous federal agencies during an administration transition, the CFTC is also in a major state of flux. The commission has seen a wave of resignations in recent weeks, including Pham, who will step down when nominee Brian Quintenz is confirmed. In the coming months, there is a chance that only one commissioner will be in place when there are supposed to be five.

Kalshi not hiding

As the situation plays out, Kalshi is certainly not flying under the radar. On Saturday, California gubernatorial candidate Kyle Langford posted a video on X of him buying $100 worth of contracts on himself to win the state’s 2026 election.

This raised several questions related to integrity and election interference. In response, a Kalshi rep posted the following on the messaging platform Discord:

“We are aware of the recently publicised circumstance regarding a candidate trading on a market regarding their candidacy and our compliance and surveillance teams are acting accordingly. As required of all CFTC-regulated exchanges, Kalshi investigates and, as appropriate, adjudicates all potential violations of its Rules, which are available at https://kalshi.com/regulatory/rulebook. 

“Kalshi does not give public comment on the status of ongoing investigations. The outcome of such an investigation, or any pursuant notice of charges or discipline, may become public via exchange notice.”

Additionally, Kalshi CEO Tarek Mansour made big headlines in the financial press last week by saying at a New York conference that “most mainstream financial brokers, where you have your 401(k), will have Kalshi markets available within app”. This furthers the contention by prediction markets that sports contracts are a legitimate economic tool.

There was also the bizarre instance earlier this month in which Kalshi announced a partnership with Elon Musk’s xAI, only to retract the announcement that same day.

“No one has fought for truth harder than Elon Musk,” Mansour said in a since-deleted post. “He has inspired me at every step. I could not be more excited to announce Kalshi’s upcoming partnership with xAI to further take prediction markets mainstream. Together, we’ll shape the future of news and information.”

 Gaming tribe leaders will finally hear something from the CFTC on Thursday regarding prediction market issues.