Attorney Urges Tribes, States to Fight Against Prediction Markets

A gaming lawyer wants tribal nations and state attorneys to cooperate and oppose prediction markets, raising concerns about legal risks and improper safeguardsImage Source: Shutterstock.com

A leading gaming attorney is urging tribal nations and state attorneys general to join forces in pushing back against prediction markets, which he says pose risks to both state authority and tribal sovereignty.

“Courts Are Finally Addressing the Issue” 

Daniel Wallach spoke on Wednesday during a webinar hosted by the Indian Gaming Association, one day after DraftKings announced its acquisition of Railbird Technologies. 

Railbird, approved by the Commodity Futures Trading Commission (CFTC) to operate as a regulated futures exchange, plans to launch event-based trading through its Railbird Exchange. 

DraftKings also revealed plans for a new mobile app, DraftKings Predictions, which will let users trade contracts tied to topics like finance and entertainment, with many expecting sports to follow. That could open the door for prediction markets in states that currently ban sports betting.

Wallach said recent court decisions in Nevada, New Jersey, and Maryland show a growing trend in favor of state regulators. 

“The courts are finally addressing the issue of Congressional intent and analyzing how implausible it would have been for Congress to ban sports betting through the Wire Act and PASPA and at the same time tacitly allow it through an obscure and opaque commodities exchange,” he said.

A ruling is expected soon in a tribal lawsuit in San Francisco, where three tribes have accused Kalshi and Robinhood of running illegal sports betting operations on tribal lands. Massachusetts has also sued Kalshi, and Wallach said if the case moves to state court, “it would be a slam-dunk victory.”

“We Won’t Stop.”

During the discussion, Indian Gaming Association Conference chairman Victor Rocha called the fight over prediction markets a test of states’ rights and tribal sovereignty. “We won’t stop. We can’t stop. That’s not what we do. We fight. We have to fight for what’s left of our sovereignty. Whatever it ngakes,” Rocha said.

Wallach credited tribes for helping shift momentum in these cases. “Until the tribes joined the battle, Kalshi was kicking the state’s (behinds),” he said.He also criticized prediction markets for allowing users aged 18 to 21, “the most at-risk segment for compulsive and problem gambling,” and lacking basic consumer protections. “Talk about the Wild West. This is the Wild East…”, he emphasized.