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Tribal gaming leaders say they are unsure what to expect going into a virtual meeting Thursday (May 29) with a federal regulator regarding the expansion of prediction markets, although tribes across the U.S. need to become more aware of the threat posed by sports-event contracts.
Following the cancellation of a planned roundtable by the Commodity Futures Trading Commission (CFTC) regarding prediction markets that was expected to include a significant tribal presence speaking in opposition, a private conference call was more recently scheduled between tribal leaders and acting chairman Caroline Pham.
However, tribal leaders say that much remains uncertain about the call due to be held later today and what policy impact it may actually have.
“We’re not quite sure what to expect from the call,” said Rodney Butler, chairman of the Mashantucket Pequot Tribe in Connecticut, during a webinar hosted on Wednesday by the Indian Gaming Association.
“I think we can assume that many of us were going to be heading into DC and expressing our concerns with where this was headed, and the CFTC probably didn’t want to hear that in person, but we’re appreciative that they’re willing to spend the time to meet with us virtually.”
Joe Webster, managing partner of the law firm of Hobbs, Straus, Dean & Walker, expressed similar sentiments and said information about the call has been sparse.
“There hasn't been a whole lot of information put out about the call,” Webster said. “It was an invitation to certain groups that had submitted comments [to the CFTC] to participate in a call with the acting chair, but unless others have heard differently, I don't think we know whether it's going to be interactive or whether it's just going to be make your presentation and move on.”
The call comes at a time of upheaval at the CFTC, as four of the agency’s five commissioners, including Pham, have either resigned or announced plans to step down.
President Trump's pending nominee to become CFTC chairman, Brian Quintenz, has yet to receive a confirmation hearing in the Senate.
"I think when you look at the bigger picture of the impending resignations, including the acting chairs, I just don't anticipate there's going to be a whole lot,” said Bradley Bledsoe Downes, founder of an Arizona-based law firm that specializes in tribal law.
“I think we have a clearing of the cupboard so that the new chair can come in and fill it how he might want to,” he said.
“And I may not be as positive, but I feel like this is, at best, a courtesy, because they canceled the roundtable that was going to be out in the public and instead, we get a private call that with really a commission that's not going to be able to act on any of our concerns.”
Jason Giles, executive director of the Indian Gaming Association, said tribes will hold their own roundtable discussion at the National Congress of American Indians next month at Foxwoods Resort Casino in Connecticut, operated by Butler’s Mashantucket Pequot tribe.
“I'm on every single national tribal board you can think of, and I've been on the conference trail, but talking to tribal leaders across the country, they're not even aware of this,” Butler said.
“It's complicated initially, but the simple point is that it's circumventing these government-to-government agreements that we've had in place that have fed and fueled our economies and our communities,” he added, referring to tribal-state gaming compacts that grant many tribes exclusive rights or other protections related to the operation of sports betting and other forms of casino gaming.
“And so it's important for us to speak up and make sure that the CFTC understands our concerns, but more importantly, the administration and Congress understand our concerns.”
Butler acknowledged that different tribes have varying levels of influence, but emphasized that all should be speaking out in some way.
“We have leverage in a state like Connecticut, because we have exclusivity and between us and Mohegan, we're sending a couple hundred million to the state of Connecticut, and we say, look, if you're going to allow this, we're not going to pay you for that exclusivity, right?” Butler said.
“Not everybody has that ability to do that, but at minimum, everyone should be just screaming from the mountaintops on this one that we have to do something.”
Bledsoe Downes said that despite several early wins by Kalshi in lawsuits against state regulators that blocked the regulators from taking enforcement against what they deemed to be an illegal gambling operation, he believes future challenges that focus on the CFTC’s role in allowing the contracts to take effect could have differing outcomes.
"I think as we go through this, getting people aware of that, and then figuring out how best to get the courts to look at this issue and say, 'this regulation says you can't do this, why didn't you act CFTC?'” he said.
“Whether that's going to come up in these actions by, for instance, Kalshi against the state regulators, or whether it's going to have to be in a more direct action involving the CFTC as a party, I think that's one of our significant questions, and I think it's going to end up ultimately having to be an action that involves the CFTC.”
Butler said stakeholders outside tribes should also be more involved in the process, including state governments and other sports-betting stakeholders, such as commercial operators and professional sports leagues.
“There's a lot of arrogance in gaming operators, and especially in some of the big commercial operators, and they just don't think it's going to impact them,” he said.
“I think they're just slow to warm up to the idea that this is a real threat,” Butler added.
“Some people are taking advantage of the chaos that’s going on right now and these guys are flying under the radar until all of a sudden, they’re a multi-billion dollar business and they’re threatening the billions of tax dollars that are going to states and the tens of billions of dollars that are going to our economies.”
