Why We’re Paying Attention to Prediction Markets

As a Native law student and young professional engaged in tribal governance, gaming and federal Indian law, we have been paying close attention to the rapid rise of prediction markets and the debate surrounding their regulation. What began as an academic topic has become a real-world issue with potentially significant implications for tribal gaming and tribal sovereignty.

Within the past two years, there has been a spike in online sports betting via prediction market websites. These prediction markets allow users to buy “event contracts” to speculate on whether an event will occur. Kalshi, along with Polymarket and Robinhood, allows users to buy event contracts on political events, weather predictions, and celebrity news. However, on Kalshi, an estimated 90% of activity is sports betting.

The issue has attracted growing national attention. In May, the American Gaming Association estimated that states and tribes had lost more than $1 billion in gaming revenue due to the growth of prediction markets. During a CNBC interview, association President and CEO Bill Miller said states and tribes are losing revenue that would otherwise support community projects and public services.

Although prediction market sites do not consider their event contracts to be sports betting, users are still risking money on the results of a sporting event. Additionally, since prediction markets do not consider themselves to be sports betting, they allow users to be 18 years old versus 21 to place a bet at a casino sportsbook. Because prediction markets consider their sports bets to be event contracts instead of traditional wagers, they have been able to avoid regulation from state and Indian gaming commissions.

Although prediction market sites may not be physically operated within a state, users can access them from anywhere with an internet connection, including Indian reservations. Section §2701 (5) of the Indian Gaming Regulatory Act (IGRA) states: “Indian tribes have the exclusive right to regulate gaming activity on Indian lands if the gaming activity is not specifically prohibited by Federal law and is conducted within a State which does not, as a matter of criminal law and public policy, prohibit such gaming activity.”

In May, the Pueblo of Isleta, Pueblo of Pojaque, Pueblo of Sandia, and the Mescalero Apache tribe filed a lawsuit against Kalshi in New Mexico federal court for IGRA violations as well as allowing users under 21 to use their site.

Through our studies and work in tribal governance and federal Indian law, we have examined the legal history that led to the passage of IGRA. The early efforts of tribes such as the Seminole, Barona, and Cabazon were important steps toward self-determination and helped establish the legal framework that governs tribal gaming today.

From our perspective, this is why prediction markets deserve careful scrutiny from tribal leaders, regulators, and policymakers.

The legal challenge brought by the New Mexico tribes illustrates that this debate extends beyond questions of market innovation or consumer choice. At its core, the issue is whether decades of tribal advocacy, litigation, and legislative progress that established tribal gaming as a tool for self-determination can be undermined by online platforms operating outside traditional regulatory frameworks.

For our Native communities, sovereignty is not just a legal principle; it is something lived and felt every day. Tribal gaming has long been one of the most powerful expressions of that sovereignty. It represents decades of legal battles, political will, and sheer determination by Native Nations to build something lasting for their people.

Those concerns are increasingly being raised by tribes, as well as state regulators, lawmakers and gaming industry organizations.

What gives cause for cautious hope, however, is that tribes are not fighting this alone. States are beginning to recognize that prediction markets pose a threat not just to tribal interests, but to the integrity of gaming regulation as a whole. In May 2026, Minnesota made history by becoming the first state in the nation to ban prediction markets outright.

Congress is also weighing the issue. During an April hearing, members of Congress warned that classifying sports prediction markets as financial products rather than gaming activity could undermine tribal-state gaming compacts and weaken tribal exclusivity under IGRA.

Governor Tim Walz signed the legislation as part of a broader public safety bill, making it a felony to operate, host, or advertise prediction market platforms within the state. The bill passed with overwhelming bipartisan support: 100 to 32 in the House and 57 to 9 in the Senate, a clear signal that this is not a partisan issue. It is a matter of protecting communities, preserving regulatory integrity, and honoring the hard-won rights of tribal nations.

For Anisa, the issue is especially close to home. Southern Paiute peoples have called this land home for generations, long before Nevada was a state, long before the Strip existed. Nevada has some of the most robust gaming oversight in the world, yet platforms like Kalshi continue to operate outside the state’s gaming regulatory framework. If tribes and gaming operators are expected to follow established rules, prediction markets should not be allowed to operate under a different standard.

As young Native people studying and working in fields connected to tribal governance, we do not pretend to have all the answers. But we believe prediction markets raise important questions about tribal sovereignty, gaming regulation and the future of a legal framework that tribes spent decades building. Those questions deserve attention — not just from courts and regulators, but from Native communities as well.

Joseph "Joe" Marmon (Laguna Pueblo) is a J.D. candidate at the William S. Boyd School of Law at the University of Nevada, Las Vegas, where he studies federal Indian law, tribal sovereignty, and gaming regulation.

Anisa Pelayo (Southern Paiute/Navajo) is communications coordinator for the Indian Nations Gaming & Governance Program at UNLV and a recent graduate of the university's marketing program.

DISCLOSURE: This article is sponsored content created by Native Story Lab for Tribal Development Partners. It was created and published as part of a paid partnership and was not reported by the Tribal Business News editorial team.