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Gaming industry stakeholders, including leading trade groups representing the commercial and tribal gaming industries, have not held back in voicing their concerns to federal regulators about the development of sports event contracts.
The American Gaming Association (AGA) wrote in a letter to the Commodity Futures Trading Commission (CFTC) that contracts based on sports were “problematic”, with the Indian Gaming Association (IGA) and several state-level tribal gaming associations voicing similar opposition to the development.
The CFTC solicited comments and requests to participate in an upcoming roundtable discussion on prediction markets after the genre has significantly expanded in recent months to include wagering on elections and contracts on sporting events.
“The AGA and our members have very strong concerns about the recent self-certification of what are essentially sports betting futures, which are currently available to retail customers in all 50 states,” wrote Chris Cylke, senior vice president of government relations for the AGA.
“In addition to posing an unfair economic threat to sportsbook operators who have invested in pursuing licensure and regulatory compliance on a jurisdiction-by-jurisdiction basis, the introduction of a 'national' sports-betting product severely undermines state regulatory authority while also jeopardizing state tax revenue,” Cylke continued.
Cylke also wrote that the contracts may violate the federal Wire Act and could also be subject to the federal excise tax on sports wagers.
In another letter to the CFTC, Las Vegas Congresswoman Dina Titus, a Democrat and co-chair of the Congressional Gaming Caucus, wrote that the contracts “create a backdoor way to legalize sports betting in states that have not authorized it”.
She also pointed out that although proponents argue that the contracts are not a betting product, marketing by CFTC-regulated prediction markets operator Kalshi frequently tells customers that they can “bet” on events.
“It is clear that prediction markets are not an investment product, but instead another form of sports betting,” Titus wrote.
“Before the commission allows sports betting in all 50 states, I hope they listen to the feedback presented at this roundtable and consider the harm that contracts on sports events would have on the legal gaming ecosystem that provides tax revenue, responsible gaming resources, integrity monitoring, and consumer protection.”
Perhaps the most overwhelming response came from tribal leaders.
Of the 18 entities to submit comments to the CFTC, 11 were either individual Native American tribes or associations representing multiple tribes.
Many of the tribal letters contained similar or identical language, suggesting a coordinated response by the Indian gaming sector to the emergence of sports event contracts.
In its letter, the Indian Gaming Association urged the CFTC to explicitly prohibit sports-based contracts, calling them a form of gaming, contrary to public policy and arguing that they violate various state and federal laws.
“Importantly, allowing sports contracts to be listed and traded will interfere with the sovereign right of tribes and states to exercise their police power to regulate gaming within their respective territories — a right long recognized by courts throughout the United States,” wrote Ernie Stevens Jr, chairman of the IGA.
“Additionally, listing and trading sports contracts would decimate the value of the bargained-for-exchange made between tribes and states in their gaming compacts when tribes agree to share their gaming revenues — contributing billions to state governments — in exchange for substantial exclusivity over sports betting in their state.”
Other tribal organizations that voiced opposition to sports contracts were the California Nations Indian Gaming Association (CNIGA), California's Tribal Alliance of Sovereign Indian Nations (TASIN) and the Oklahoma Indian Gaming Association (OIGA), which are both states where tribes hold gaming exclusivity and sports betting is currently not permitted.
A host of additional California tribal organizations and individual tribes also submitted comments, as did the Arizona Indian Gaming Association.
Although most of the comments submitted to the CFTC were opposed to the concept of sports event contracts, several letters were filed in support.
That included one from financial services company StoneX Group, which argued that the CFTC should develop a permissive regulatory framework for event contracts in general, and that among other things, the contracts could provide a mechanism for companies to hedge risk outside a traditional betting concept.
“Even sports event contracts serve a valuable hedging purpose for a wide range of businesses,” wrote Renato Mariotti, an attorney with the Paul Hastings law firm arguing on behalf of the company.
“Consider companies that created tens of thousands of hats touting the Kansas City Chiefs as the 2025 Super Bowl champions. Those companies could have hedged this investment by purchasing event contracts that generated a profit if the Chiefs lost the Super Bowl, thereby recouping at least some of the money they otherwise lost in printing the hats.”
The Campaign for Fairer Gambling (CFG) also submitted comments that were supportive of the concept, arguing that the differences in how prediction markets operate and generate revenue could result in more favorable pricing for bettors and less predatory promotional efforts compared to traditional sportsbooks.
The group said its “general view is that gambling should be permitted but not promoted”.
“CFG opposes expanding state online gambling as currently operated as this results in increased detriments of personal, social and economic harms. However, CFG recognizes the differences that will apply to a prediction market and does not have the same concerns,” the letter added.
The CFTC has yet to announce either a date when its upcoming in-person roundtable will be held, or the participants that have been selected to participate in it.
