Edgewood, New Mexico — At the Indian Gaming Association’s annual conference in San Diego this week, two words dominated the agenda: prediction markets.
In public seminars and in closed meetings, tribal leaders discussed the explosive growth of platforms like Polymarket and Kalshi, the potential threat to the tribes’ hard-earned standing, and heavy regulation in the U.S. gambling industry.
Tribal gambling companies generate more than $40 billion annually, revenues that fund health care, housing, education and other social services in Native American communities. In prediction market applications, billions of dollars are exchanged during major events like the Superbowl.
Indian Gaming Association President David Bean accused prediction markets of misrepresenting their products to avoid a carefully negotiated framework of federal, state and tribal laws.
“This is not innovation,” Bean said Wednesday during a news conference. “This is illegal gambling disguised as finance.”
The association called on Congress to clamp down on prediction markets and announced the creation of a defense fund to support legal action against the platforms.
Kalshi, Polymarket and Robinhood say their users engage in futures trading, not gambling. They dispute claims that they are circumventing regulation.
Prediction markets allow users to bet on the outcome of almost any event from the NCAA Tournament to the war in Iran. Once a specialized experiment was embraced in political science circles, the popularity of these platforms boomed andControversy Since the 2024 elections.
Market operators say their clients trade against their peers by buying and selling “event contracts.” They argue that their product is premium, and should be regulated by the CFTC like the crop or oil markets.
The Commission is considering new rules for prediction markets. But the Trump administration has done so so far Platforms supportedwhich faces lawsuits from more than a dozen U.S. states and four tribal nations.
In the seventies during what is known as Era of tribal self-determinationThe tribes were looking for tools to lift their communities out of poverty. Bingo halls and card rooms have popped up in community gymnasiums and under temporary structures on reservations across the country.
Tribes, with limited ability to tax, have used this new revenue source to rebuild their governments after decades of federal control, said Patrice Konesh, a fellow at the Brookings Institution.
“The tribes were asserting their sovereignty,” Kunish said. “This angered the states.”
After a 1987 US Supreme Court decision Blocking California’s attempt to close card rooms on two reservations within its borders, the states pressured Congress to take a role in regulating tribal gambling. The result was the Indian Gaming Regulatory Act of 1988, a complex regulatory system that Kunish described as a compromise for tribes.
The law expanded the types of gambling tribes could offer, paving the way for dedicated bingo halls to grow into sophisticated Vegas-style casinos and a multibillion-dollar industry. The Indian Gaming Regulatory Act also imposes strict standards and requires tribes to negotiate gambling compacts with states.
Tribal gambling is no stranger to competition. When the Indian Gaming Regulatory Act was passed in 1988, commercial casinos were legal in only two US states. This number has since increased to 27. Today the industry competes with that Legal sports betting In 39 states and counting Online casinos.
Former National Gaming Commission of India Chairman Junodev Chaudhuri says prediction markets are unique in that they exploded into the online gaming market seemingly overnight with minimal oversight. He described the mood at this year’s Indian Gaming Association conference as one of collective anxiety.
“There is a sharper intensity of discussion than I have ever seen in these rooms,” Choudhury said.
The Indian Gaming Association said studies on the financial impact are underway.
Four tribal nations have sued Calci and Robinhood in federal court, accusing the platforms of violating federal law and agreements between states and tribes. In court filings, these platforms say they operate financial markets, not casinos or sportsbooks, and do not do business on tribal lands.
Among those legal competitors is the Ho-Chunk Nation, one of 11 federally recognized tribes with exclusive gambling rights under a compact with the state of Wisconsin. Ho-Chunk Chief John Grinder described it as a David and Goliath battle with his tribe’s social safety net hanging in the balance.
“We’re dealing with someone who makes more money in one event than we do in an entire year,” Grinder said.
The Indian Gaming Association has filed briefs in support of a growing wave of lawsuits against prediction market platforms and is marshaling resources for its potential legal battle. Asking Congress to take action is not a sure bet, given that the Trump administration supports the prediction markets industry.
“We’re seeing some hesitation on the part of lawmakers who don’t want to anger the big boss,” Bean said.
Tribal gambling companies generated nearly $44 billion in 2024, a record, according to the National Indian Gaming Commission.
Fewer than half of the 576 federally recognized tribes offer some form of gambling. Many tribal casinos, especially those in rural areas, generate just enough revenue to pay for basic government operations and social services.
According to Kunish, the costs of complying with the Indian Gaming Regulatory Act take up a significant portion of tribes’ revenues. The law also puts states in a position of negotiation Revenue sharing agreements With tribes, often in exchange for a certain degree of exclusivity.
“People think the tribes make a lot of money. That’s a terrible misunderstanding,” Kunish said.