Tribal gaming advocate Jason Giles and Nevada Gaming Control Board Chairman Mike Dreitzer challenged Kalshi’s claim that its sports-event contracts qualify as swaps, arguing that the products remain subject to gaming oversight. They raised their objections during the Indian Gaming Association’s weekly New Normal webinar, according to CDC Gaming, as state and tribal regulators contest the legal classification used by prediction-market companies.
Kalshi and other operators describe their sports contracts as innovative products that meet the legal definition of a swap. Giles, the Indian Gaming Association’s executive director, questioned what tribes signing agreements with Kalshi gain from the partnerships and warned that waiving tribal-sovereign immunity could expose tribes to future lawsuits.
Nevada says operators need a license
Dreitzer said Nevada welcomes new technology, but companies seeking to operate in the state must obtain a gaming license like other businesses. He also argued that prediction markets should not dictate policy to states such as Nevada or Utah without meeting their licensing requirements.
The Nevada regulator rejected the idea that describing a product as innovative resolves questions about whether it is an unlicensed sportsbook. He pointed to the difference between prediction-market platforms that generally allow trading from age 18 and states where legal retail and online sports betting typically requires customers to be at least 21.
Dreitzer also objected to allowing 18-, 19- and 20-year-olds to wager large sums and to operating in states where the activity may violate gambling laws. Nevada’s position, as he described it, is that innovation does not exempt an operator from licensing and consumer protections.
The dispute turns on whether sports-event contracts receive federal derivatives treatment or remain subject to state and tribal gaming controls. The classification matters to Kalshi’s operating position: its swap argument is intended to place its contracts under federal oversight, while regulators contend that gaming rules and licenses still apply.
Tribal partnerships draw scrutiny
Kalshi has agreements with the Tunica-Biloxi Tribe in Louisiana and the Alabama-Quassarte Tribal Town in Oklahoma to launch or plan tribally branded prediction-market apps using its infrastructure. Greenville Rancheria, Kletsel Dehe Wintun Nation and Alturas Indian Reservation in California have also signed agreements.
Tribes involved in such arrangements have presented prediction markets as a potential source of digital revenue, particularly for communities without casinos. But the Alabama-Quassarte agreement has been the subject of conflicting statements: an October 7 announcement listed the tribe among new partners, while Chief Samuel Marshall Jr. said the tribe had not partnered with Kalshi or another prediction-market operator.
Scott Crowell, a lawyer with the Tribal Advocacy Group, questioned whether the tribes’ gaming agencies had made suitability determinations about the companies involved. He also said that existing agreements with gaming companies may require renewed scrutiny if those companies enter prediction-market gaming, since licenses must remain in good standing.
Crowell said courts have addressed whether the Commodity Exchange Act preempts state gaming rules, but he knew of no court decision holding that the act overrides the Indian Gaming Regulatory Act. He said courts addressing the IGRA issue had found that it governs activity on Indian lands, where only activity expressly authorized by a tribe is permitted. Crowell also described a previously relevant case as overturned by the Ninth Circuit.
Swap classification remains contested
The disagreement is not simply over whether prediction markets use new technology. It also concerns the age of participants, the reach of state gambling laws and the authority of tribal governments over activity on their lands. The CFTC’s proposed distinctions among swaps, event contracts and sportsbook wagers address the same classification question at the center of the dispute.
For Nevada, Dreitzer’s stated position is that a company must secure a license before bringing its products into the state. For tribes, the open questions include whether agreements were properly authorized and whether partners meet suitability standards. The webinar did not identify a specific upcoming ruling or deadline that would resolve those questions.
