California Nations Indian Gaming Association Criticizes Louisiana Tribe’s Decision to Launch Prediction Market App

• The California Nations Indian Gaming Association said the Tunica-Biloxi Indian Tribe “made a profoundly disappointing decision”
• Tunica-Biloxi Indian Tribe last week announced a planned launch of a prediction market app
• The tribe will engage with the new market through Kalshi’s federally regulated exchange infrastructure

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The California Nations Indian Gaming Association criticized the Louisiana Tunica-Biloxi Indian Tribe’s recent decision for a planned launch of a prediction market app through Kalshi’s federally regulated exchange infrastructure.

The Tunica-Biloxi Indian Tribe established a new subdivision, SaltTrade Derivatives, a tribal-owned enterprise, to be the first federally recognized tribe to launch a prediction market app, according to Kalshi CEO Tarek Mansour.

The decision to do so came just days after the U.S. Court of Appeals for the Ninth Circuit reversed in part the U.S. District Court of Northern District of California’s denial of a preliminary injunction motion from the Blue Lake Rancheria Tribe against prediction market operator Kalshi, noting its opinion that sports event contracts constitute Class III gaming.

‘Profoundly Disappointing Decision’

The California Nations Indian Gaming Association (CNIGA) criticized the tribe’s decision to launch a prediction market app, citing the Ninth Circuit court’s decision to classify sports event contracts as Class III gaming under the Indian Gaming Regulatory Act (IGRA).

“The Tunica-Biloxi Tribe made a profoundly disappointing decision today. Less than 48 hours after the Ninth Circuit held that Kalshi’s sports-event contracts are Class III gaming under the Indian Gaming Regulatory Act, Tunica-Biloxi chose to stand with Kalshi and help legitimize the same business model that other Tribal Nations and states across America are fighting to stop. The court made it clear that Kalshi’s sports contracts constitute Class III gaming and that entering into these contracts on Tribal lands violates the law,” CNIGA noted in a press release.

While each tribe can make its own financial decisions, CNIGA noted that it “cannot make illegal gaming legal” and that a business deal does not change the law.

“Tunica-Biloxi should know what is at stake. Tribal Nations spent generations fighting for and building a system that ensures governments, not corporations, benefit from tribal gaming. Choosing to partner with Kalshi undermines the work of all the tribal leaders who came before us, and those in the trenches today.”

‘More Paths to Economic Self-Determination’

Mansour said prediction markets can provide tribes with “more paths to economic self-determination.”

“When a new industry grows quickly, it can create understandable concern among legacy institutions. That concern carries particular weight for Tribal nations, whose sovereignty and economic institutions play an important role in America. We shouldn’t dismiss the possibility that new technology could affect these institutions, or simply ask Tribal leaders to trust that it won’t. We have an obligation to examine the evidence honestly, understand where the risks are real, and build models that let Tribal nations participate,” he wrote.

SaltTrade Derivatives, Mansour said, will use Kalshi’s federally regulated exchange infrastructure to bring its software online in similar ways other institutions have entered into prediction markets.

“As prediction markets become an increasingly important part of the regulated financial system, Tribal nations are beginning to consider what these markets could mean for their own economic development. Tunica-Biloxi is showing what innovation in Indian Country can look like. The Tribe is embracing prediction markets because they provide an innovative way for people to engage and trade on topics they care about, outside of traditional financial markets.”

Ninth Circuit Has its Say

The U.S. Court of Appeals for the Ninth Circuit last week noted in its final decision that sports event contracts do indeed constitute Class III gaming. To demonstrate a likelihood of success on their IGRA claims, tribes have to demonstrate that Kalshi’s sports event contracts constitute Class III gaming activities and the contracts are located on Indian lands, a three-judge panel reported.

“In practice, what Kalshi labels ‘sports event contracts’ neatly track the activities described in IGRA and its implementing regulations. The similarities between a sports event contract, which even Kalshi calls ‘sports betting,’ and a traditional sports wager are overwhelming,” they wrote.

The Ninth Circuit’s conclusion is reinforced by the Department of Interior’s compact review regulation, the judges noted, which defines gaming activity as “the conduct of Class III gaming involving the three required elements of chance, consideration, and prize or reward.”

Secondly, the judge panel concluded the tribes did indeed prove the contracts were “located on Indian lands” as users entered into the contracts from tribal territory.

“Third, the tribes demonstrated that Kalshi was offering the contracts in violation of the tribes’ secretarial procedures, which treat class III gaming as lawful only when tribally authorized and conducted through the tribal regulatory structure. Because the secretarial procedures in this case depended on and incorporated the tribes’ ordinances, and Kalshi’s sports event contracts were not authorized by those ordinances, Kalshi’s contracts were also in violation of the compact between the tribes and the State of California,” they noted.