Two high-ranking executives with the Indian Gaming Association sounded a warning Wednesday that tribes will have to lobby Congress and beef up any legal action if they want to prevent sports betting prediction markets from taking away market share and revenue from Indian Country.
The comments from Jason Giles, IGA’s executive director, and Victor Rocha, conference chairman, came during an IGA webinar just before FanDuel announced it’s launching a sports betting app in December in states without online wagering, while geofencing on tribal lands. That includes states like California where Rocha lives.
Rocha said in an interview he heard from FanDuel after the webinar about their plans to launch the app and told them that FanDuel, DraftKings, and any others that operate in California in the future will face the wrath of tribes and elected state officials.
“They will not only have a war with the California tribes, but they will have a war with the California politicians and the California people,” Rocha said. “We will protect the sovereignty of California and the sovereignty of tribes and use every resource we have available.”
Rocha said he’s not surprised by Wednesday’s announcement. He said he met with DraftKings and FanDuel executives during G2E in October and was warned of their plans to enter the prediction markets. They said their stockholders demand they act and that they couldn’t let pioneers like Kalshi and Polymarket dominate the prediction markets any longer.
In court Monday in California, a federal judge denied three California tribes an injunction to stop Kalshi from operating in the state. Judge Jacqueline Scott Corley of the U.S. District Court for the Northern District of California rejected a bid by Blue Lake Rancheria, the Chicken Ranch Rancheria of Me-Wuk Indians, and the Picayune Rancheria of the Chukchansi Indians for an injunction that would have required Kalshi to stop offering sports event contracts on their lands.
“They are showing a little fear of states’ rights, because that’s what it’s going to be about,” Rocha said of prediction market operators. “We have a lot of influence in California and plan to use every single ounce of goodwill we’ve built up over the last 30 years.”
Rocha expressed frustration that there’s no respect for tribal sovereignty, state laws, and the wishes of people within a state and called it “end-stage capitalism.”
California voters rejected online sports betting in the 2022 election pushed by DraftKings, FanDuel, and others, in which hundreds of millions of dollars were spent on advertising. A tribal ballot measure to allow only retail sports betting at their casinos and at state racetracks failed as well.
“They they’re going to geofence the tribes and that should make us happy. That’s a clear violation of the spirit of our agreements. We Governor Newsom who wants to be president. We have these companies affiliated with the Trump (family) and violating state sovereignty. We’re going to turn the heat up on those guys, and it’s going to be a boiling cauldron when it’s done.”
During the webinar before the announcement, Rocha and Giles were a little somber over the court ruling on Monday that denied the tribal injunction in California.
“At the heart of the ruling, the tribes in her mind didn’t establish that nexus between the Indian Gaming Regulatory Act (passed by Congress) and gambling on reservation lands,” Giles said. “In the same ruling, she’s saying Kalshi and these other companies may have found a way around prohibitions of interstate gambling that violate state law.”
Giles said it isn’t known what the tribes must prove to support their case going forward. If this were Oklahoma, the state could cite the billboards Kalshi has up on highways during the NBA Finals as evidence.
“These tribes don’t have that yet, and we have to look for other evidentiary items we can bring up for these courts to consider and establish between IGRA and the (federal Commodity Futures Trading Commission) regulations,” Rocha said. “It doesn’t mean their lawsuit is wrong. They just have to go back and reevaluate their pleadings and get more evidence-backed pleadings to win these preliminary motions and get to discovery.”
A Kalshi spokesperson provided this comment about the ruling, “We welcome today’s decision denying the plaintiff tribes’ motion for a preliminary injunction. Kalshi’s nationwide federally regulated exchange offers all users a fair and transparent way to trade event contracts. Casinos located on tribal lands offer their customers a fundamentally different product.”
Rocha said that these prediction markets fall under the CFTC and are trying to use that as immunity, and judges don’t have answers.
“That the three tribes in central California didn’t have success doesn’t mean we won’t have success later,” Rocha said. “We just have to make a better argument.”
Rocha said tribes have to follow the lead of what they did on cracking down on sweepstakes in California —learning how to handle the online casino gaming that other states have declared illegal.
“With prediction markets, we have to go state by state and prepare everyone to start filing these lawsuits,” Rocha said. “When this goes to the Supreme Court, it’s not going to be a tribal issue. It’s going to be a states’ rights issue. This will keep being an unanswered question until we get to the Supreme Court.”
Giles said they’ll send a letter to tribes urging them not to do marketing deals with sports franchises that partner with prediction markets.
“The court case raised the question whether tribes still have exclusivity in the digital age,” Giles said. “That’s a question for the states as well.”
Prediction markets will make as much money as they can, because they know some form of regulation is coming. They never talk about problem gambling and knowing your customer to stop money laundering, Giles said.
Rocha responded that tribes need to push their state politicians, including attorneys general, to do something.
“It needs to be all hands on deck,” Rocha said. “There are no vacations. This isn’t Congress. We don’t get a break. We fight every single day until this is over.”
“The short-sightedness of these prediction market folks is stunning, but it’s mostly a cash grab,” Giles said.
Prediction markets are impacting lives because they’re taking bets from 18 and older, compared to tribal casinos that won’t take bets until they are 21, the duo said.
“It is a rigged game right now,” Giles said. “There is no oversight. That’s good for them to make a bunch of money right now, but it will catch up with them and they will tick off enough customers.”
That’s why it’s important for Congress to address the issue and maybe the CFTC gets involved in litigation going forward, Giles said. Many lawmakers are unaware of what’s happening and how prediction markets are ingratiating themselves with the Trump administration.
The CFTC will do nothing unless told to do so by Congress or the courts, he said.
Giles also worries the prediction markets will get so big that some lawmakers will be reluctant to shut them down.
Rocha countered that no one should argue that these operators are too big to fail, because they add nothing to society.
“This isn’t steel mills, the railroads, or mining,” Rocha said. “This is gambling. It will come down to whether states have the right to control gambling in their own state.”
