Michael Selig, chairman of the U.S. Commodity Futures Trading Commission (CFTC), has signaled support for allowing federally regulated platforms to list contracts linked to sports results, describing such products as financial instruments rather than wagers. He provided congressional testimony on Wednesday, triggering concern from tribes.
During the House Agriculture Committee hearing, Selig said prediction markets could “play a role in price discovery,” underscoring the agency’s view that sports-related contracts fall under the Commodity Exchange Act as swaps, not gambling regulated by states or tribes.
However, tribal officials argue that the distinction threatens decades of negotiated exclusivity under the Indian Gaming Regulatory Act, which underpins tribal-state compacts across the United States.
“If the federal government decides these are commodities instead of bets, it wipes out the foundation of tribal exclusivity,” said David Bean, chairman of the Indian Gaming Association. “That’s not modernization — that’s erasure.”
Bean warned that federally approved prediction markets could erode tribal revenues and jobs, adding: “Prediction markets threaten these rural jobs and the progress that we’ve achieved by violating our laws, federal laws, and the laws of our state government partners.”
He also pointed to the similarity between existing betting products and prediction markets, saying: “Pull up your Kalshi app for one second, and you’ll see the same bets that are offered in every other legal sportsbook.”
Lawmakers raised similar concerns during congressional discussions, questioning whether such products differ meaningfully from traditional sports betting.
“In too many cases it’s just gambling by another name,” said in the hearing Jim Costa, a U.S. Representative, who added the products “aren’t some new harmless financial product.”
Costa warned that allowing contracts on “sports, politics, in some cases even on war, instability and human suffering” risks undermining public trust and tribal agreements. He said the CFTC risks “looking less like a market regulator and more like a body giving permission for these platforms.”
“I don’t believe Congress intended for sports betting to be repackaged as a financial product to dodge rules that apply to everyone else — including our tribes,” he added.
Gabe Vasquez, another U.S. Representative, echoed those concerns, saying consumers “couldn’t care less if they were using an official sportsbook.”
“Tribes in my district have gone through decades-long negotiations, agreements, and settlements,” Vasquez said. “When a federal agency allows prediction markets to bypass these longstanding requirements, it undermines tribal sovereignty and state protection.”
Challenging the CFTC’s framing of the products as risk-management tools, Vasquez said: “With all due respect, I don’t think this is hedging. This is a bet that’s clearly sports gambling.”
“If this product looks like sports betting, the public should expect sports-betting-type protections and regulations,” he added. “At the end of the day, this comes down to a simple question: Are we regulating real economic risk, or are we allowing prediction markets to steal billions of dollars in an unregulated free-for-all as Congress and CFTC turn a blind eye?”
The CFTC has indicated that state gambling laws could be preempted when applied to federally regulated event contracts, further heightening tensions with tribal governments.
CFTC Enforcement Director David Miller has warned that certain contracts, such as those tied to player performance or injuries, carry risks of manipulation and insider trading, though he framed those issues as market integrity concerns rather than gaming enforcement.
Tribal leaders say such distinctions overlook the broader impact on their regulatory authority and economic base, arguing that treating sports prediction markets as financial instruments would effectively sideline tribal-state compacts.
James Siva, chairman of the California Nations Indian Gaming Association, said the regulator is moving ahead without adequate consultation.
“There is no way around it. They can call these prediction markets. They can call them sports event contracts, but it is illegal sports betting with very little oversight,” Siva said.
“This is (without) exaggeration, the largest and fastest-moving threat our industry has ever seen in its 30-plus year existence."
The debate comes as the CFTC advances a proposed rule on prediction markets released March 12, which would define the types of event contracts that exchanges can offer. The proposal has triggered widespread feedback from tribal governments, regulators, academics, and industry stakeholders.
Critics argue that Congress did not intend for contracts tied to gaming to be permitted under the Commodity Exchange Act, and note that sports betting remains regulated at the state level following the Murphy v. NCAA ruling.
Tribal representatives say the outcome of the rulemaking could reshape the balance between federal oversight and state-regulated gaming, with significant implications for tribal sovereignty and revenues.
Dingnews.com 20/04/2026