FEDERAL VS STATE REGULATION
While the District Court Judge may have ruled in Kalshi’s favor, she left room for disagreement, by observing: “As a final note, the Court does not take lightly Plaintiffs’ concerns about the effects Kalshi’s activities might have on tribal sovereignty and the Tribes’ finances. Indeed, by self-certifying the legality of its event contracts in a way that insulates its activities from judicial review, Kalshi may have found a way around prohibitions on interstate gambling that were created with the Tribes’ best interest in mind.” There appears to be further momentum building across the country behind tribal opposition to prediction market platforms. The Southern Ute Indian Tribe and the Ute Mountain Ute Tribe filed a complaint against the state of Colorado seeking to obtain a ruling supporting their ability to conduct statewide digital sports betting akin to Florida’s “Seminole Model” (bets are deemed placed where received). 13 However, the complaint was dismissed based upon the court’s opinion that the language differences between the Florida and Colorado compacts signified each state’s consent to different sports betting models. The Colorado tribes may not be willing to accept Kalshi’s operation throughout Colorado, when the court has ruled that tribes cannot so operate. This may be a particular sticking point for tribes, given the similarities between Kalshi’s argument that SE Contracts in California are made “thousands of miles away” and the unsuccessful Colorado tribal argument that sports bets are placed where received. At the time this article was written, the Colorado tribes had not yet determined whether to appeal the court ruling.
Analysis The patchwork of interrelated court cases across the nation may well end up at the United States Supreme Court. In the interim, various questions have arisen that have an equal potential to shape the tribal gaming landscape in the United States.
Those questions include: •
Is a SE Contract a swap or gambling? Does IGRA take precedence over the CEA?
•
• How will the CFTC interpret the location of the placement of swaps? Will this matter? • Can IGRA and the CEA be read together such that prediction markets may offer SE Contracts nationwide so long as they geofence out all tribal lands? • If a wager’s placement largely depends on tribal-state gaming compact language, will various tribes seek to revise their compacts? • If Kalshi and other prediction market platforms are permitted to continue forward, will tribes choose to seek out commercial partners to compete with similar products? • If tribes do explore the commercial route, how will the regulatory regime operate as between the tribes and states? • Will Congress enter the fray with new or additional legislation to clarify its intent? In any event, legal gaming expertise and jurisprudence will need to continue to rapidly evolve to account for the regulatory and statutory gaps created by technological innovation. Special thanks to Caitlin Vanderkarr, a former associate at Snell & Wilmer, who assisted with preparing this article.
HEIDI MCNEIL STAUDENMAIER
Partner, Snell & Wilmer For information contact +1 602 382 6366 hstaudenmaier@swlaw.com
13 Jill R. Dorson, EndGame: NCAA To Delay Allowing Prop Betting, No Seminole Model Here, More, InGame (Oct. 31, 2025), https://www.ingame.com/endgame-ncaa-reverse-tribal-gaming-rozier/.
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