State governmental entities, including state gaming commissions, have brought these matters to the courts and have requested that the CFTC take action against trading companies offering unlicensed sports pools. Thus far, the New Jersey and Nevada gaming commissions issued cease and desist orders to KalshiEX, LLC. As of now, Federal District courts have granted preliminary injunctions in favor of Kalshi which had asked the courts to temporarily halt the enforcement of state laws against them. Kalshi has also moved for a preliminary injunction in the Maryland District Courts, but the Court has yet to reach a decision on the matter. 6 Please note, however, that all such decisions have thus far been preliminary, and the courts have not yet heard the cases on the merits. 7 For now, it is not clear whether the Maryland District Court will follow the Nevada and New Jersey District Courts in granting Kalshi’s preliminary injunction, but this decision will be informative for other gaming commissions who may be involved in similar matters. Additionally, these “event contracts” authorized by the CFTC lack all of the regulatory structure that protects the gaming industry and gaming public. Currently, these event contracts are offered with zero age verification, no geolocation restrictions, zero background checks and financial integrity reviews, no list of prohibited participants such as athletes, coaches, and referees. Sports event contract operators allow persons under 21 to gamble in violation of tribal and state laws, while portraying sports bets as “investments”—confusing the public about the risks of gambling . (emphasis added). By allowing these event contracts that are wholly unrelated to commodities, the CFTC risks making public policy decisions that ignore the detrimental impacts from sports betting that every State and Tribal government has a sovereign duty to evaluate. Additionally, every sports event contract that is traded on tribal land or in violation of a Tribal-State compact deprives tribes and states of revenue that our communities rely upon. Unless acted upon, the number of sports-based event contracts traded on the Derivatives/Futures market is only expected to grow, ushering in growing concern for consumers, State and Tribal gaming operators, and regulators across the United States. We are asking for the NIGC to take action now in order to protect our Tribal consumers and patrons. We respectfully request your office to use the full scope of its authority under IGRA to clarify that sports event contracts are illegal on Indian Lands, and that CFTC’s permissive conduct regarding prediction markets conflicts with IGRA’s mandate that tribes have the “exclusive right to regulate [and operate] gaming activity” within their jurisdiction.
Sincerely, {Insert Tribal Gaming Commission}
6 See generally, Kalshiex LLC v. John A. Martin, et al. , Case No. 25-cv-1283 (D. Md. Def’s Opp to. Mot. For Preliminary Injunction filed May 9, 2025). 7 See generally, KalshiEX, LLC v. Hendrick, et al. , Case No. 25–00575, 2025 WL 1073495 (D. Nev. Apr. 9, 2025); and Kalshiex LLC v. Mary Jo Flaherty, et al. , Case No. 25-cv-02152, 2025 WL 1218313 (D.N.J. Apr. 28, 2025).
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