California Indian Casino Leader Says CFTC Nominee Must Examine Prediction Markets
The Senate Agriculture Committee advanced Michael Selig's nomination to head the Commodities Futures Trading Commission (CFTC) on Thursday, paving the way for a full chamber vote. A tribal casino leader in California is urging Selig to scrutinize prediction markets ahead of that vote.
The chairman of the California Nations Indian Gaming Association (CNIGA), James Siva, stated that while he and tribal casino operators in the most populous state are willing to collaborate with Selig, he reaffirmed that attempts to authorize online sports betting were categorically rejected by the state's citizens.
"California voters have overwhelmingly rejected legalizing online gambling, yet several prediction market companies are offering products advertised as legalized sports betting in the state,” said Siva in a statement. “These products violate federal, state, and tribal government laws, as well as the CFTC’s own regulations, and the CFTC has failed to take action to stop such illegal activities.”
President Trump appointed Selig to head the CFTC, the federal agency that regulates derivatives exchanges, including prediction markets, replacing Brian Quintenz.
Selig said he will abide by court decisions regarding prediction markets
Selig stated in testimony before the Senate Agriculture Committee that he will allow courts to guide his decision-making process regarding prediction markets. However, tribal gaming entities may find this insufficient, claiming that event contracts amount to an expansion of gaming that the tribes did not approve of.
Due to their exclusivity agreements with the governments, increased wagering options are handled by the tribes in some states, including major ones like California and Florida. Some tribes contend that prediction markets violate these rules because businesses that provide event contracts take use of legal loopholes to assert that sports derivatives differ from conventional sports betting.
“Today, prediction market operators are exploiting a regulatory vacuum to push a sweeping, back-door expansion of gambling to every corner of the country, regardless of existing federal, state, and tribal laws,” adds Siva. “Mr. Selig said during his hearing that he will look to the courts as to what constitutes ‘gaming.’ We suggest Mr. Selig start by looking to the U.S. District Court for the District of Columbia, which held in Kalshi v. CFTC that the term ‘gaming’ includes sporting events.”
Since California is the state that sports book operators have most desired but haven't been able to enter, it could easily become one of the main battlegrounds in the prediction markets dispute. Prediction markets, which are already being used by companies like Kalshi, are seen by these operators as a workaround.
Prediction markets, on the other hand, are viewed by the tribes that control the multibillion-dollar casino sector in the Golden State as a danger to their sovereignty and the economic advantages they provide to the local populations.
Siva wants Selig to cancel contracts for sporting events
Siva's stance is evident. If verified, he wants Selig to collaborate with tribes who have gaming interests in order to get rid of contracts for sporting events and other derivatives that resemble casino games.
“Failure to do so undermines decades of safeguards for sports integrity, consumer protection, tribal sovereignty, and state authority,” concludes the CNIGA leader. “We need the CFTC to respect the longstanding authority of state and tribal governments to define, regulate, and oversee any gaming activities that take place within our borders.”
