A broad coalition of Tribal Nations and Tribal organizations is urging the U.S. Supreme Court to take up a case involving prediction market company Kalshi and determine whether its sports-event contracts constitute sports betting subject to federal, state and Tribal gaming laws.
In an amicus brief filed in Flaherty v. KalshiEX, the Tribal coalition argues that Kalshi and other prediction market companies are attempting to conduct sports betting while avoiding the regulatory framework that governs lawful gaming.
The coalition is asking the Supreme Court to grant review and reject efforts by Kalshi to offer sports betting without complying with the laws and regulations that apply to traditional gaming operators.
At the center of the dispute is whether sports-event contracts offered by Kalshi are considered sports bets and, if so, whether they are subject to state and Tribal gaming regulations.
The coalition argues that Kalshi’s contracts are sports bets regardless of the terminology used by the company. It also contends that Kalshi has offered sports-event contracts on Indian lands without Tribal authorization, raising questions under the Indian Gaming Regulatory Act (IGRA), the 1988 federal law governing gaming on Indian lands.
The brief argues that Congress did not intend to overturn decades of federal, state and Tribal gaming law when it added the term “swaps” to the Commodity Exchange Act in 2010.
The legal dispute has produced conflicting decisions in the federal appellate courts. The Ninth Circuit rejected the argument that the 2010 amendment effectively displaced the existing gaming regulatory framework, while the Third Circuit reached a different conclusion. The Tribal coalition argues that the split warrants Supreme Court review.
The coalition says the case has significant implications for Tribal sovereignty and economic self-sufficiency.
More than 250 Tribal governments operate gaming facilities on Indian lands across 29 states. Revenue generated by Tribal gaming supports a range of governmental services, including health care, education, housing, public safety, infrastructure and cultural preservation.
Tribal Sovereignty at Issue
The brief argues that prediction market companies offering sports-event contracts compete with Tribal gaming operations while avoiding many of the regulatory requirements imposed on lawful gaming operators.
The coalition contends that the issue extends beyond gaming revenue because Tribal gaming operations also contribute to local and regional economies through employment and economic development.
“Every dollar illegally diverted to gaming on prediction markets is a dollar that no longer goes to jobs, housing, healthcare, education, public safety, and other critical government services for tribal citizens and their surrounding communities,” the brief states.
The coalition also argues that allowing prediction market companies to operate sports betting on Indian lands without Tribal authorization undermines the authority of Tribal governments and the regulatory structure established under IGRA and Tribal-state gaming compacts.
A Call for Supreme Court Review
The Tribal coalition is asking the Supreme Court to resolve the conflict among the federal appellate courts and clarify how federal commodities law interacts with the nation’s longstanding gaming laws.
The brief argues that Congress did not intend its 2010 amendment to the Commodity Exchange Act to dismantle the regulatory system developed over decades by federal, state and Tribal governments.
The coalition is asking the Court to grant certiorari and, ultimately, restore what it describes as the balance among federal, state and Tribal gaming regulation established by Congress.
For Tribal Nations, the case represents more than a dispute over how sports-event contracts are classified. The coalition argues that the outcome could affect Tribal sovereignty, the authority of Tribal governments to regulate gaming on their lands and revenue streams that support essential services for Tribal citizens and surrounding communities.
