The end is coming for sports event contracts, at least according to Indian Gaming Association (IGA) Conference Chairman Victor Rocha. In the aftermath, companies like DraftKings will regret their push into the industry, he told Gaming America in no uncertain terms.
“DraftKings is f***ed. Once prediction markets lose sports betting, DraftKings has to come down like a piñata, and we’ll be waiting with baseball bats. A lot of companies will lose big after we neuter Kalshi,” Rocha said.
Rocha also said he expects more tribal lawsuits against prediction markets following the Ninth Circuit’s ruling in favor of two California tribes in their case against Kalshi.
DraftKings Tribal Partnerships Could Be At Risk
DraftKings operates online and retail sports betting in several states through agreements with tribal groups. This includes states that have strongly opposed prediction markets, such as Connecticut, Arizona, and Washington state.
According to Rocha, these agreements could be in jeopardy due to the company’s continued pursuit of prediction markets.
Ahead of the new NFL season, DraftKings launched a nationwide campaign declaring its app is now live in all 50 states. The company has specifically targeted states without legal sports betting, including Texas and California.
In California, DraftKings has been attempting to garner goodwill among tribes to push for a legal sports betting framework. Any goodwill appears to have been lost since the company went all-in on prediction markets.
James Siva, Chair of the California Nations Indian Gaming Association (CNIGA) and a close ally of Rocha, said he was monitoring the activities of commercial operators.
“Everyone is aware of which online sports betting operators have moved into prediction markets and which ones haven’t,” Siva said. “We’re keeping track of that.”
SCOTUS Will Rule Against Kalshi, Rocha Predicts
The legal status of sports event contracts looks destined for the Supreme Court after the Ninth Circuit sided against Kalshi.
“Since the beginning, we’ve said that Kalshi’s legal fiction of treating prediction markets as swaps violates state and tribal sovereignty,” Rocha said. “Court ruling after court ruling has agreed with us.”
After some initial success last year and the Third Circuit’s 2-1 ruling in favor of Kalshi, judges have almost unanimously agreed with Rocha.
The last 14 federal court rulings have all gone against the company, rejecting the argument that its sports markets fall under the Commodity Exchange Act (CEA) definition of “swap”. Overall, states have prevailed on 37 out of 43 court rulings on preliminary injunctions, gaming lawyer Daniel Wallach posted on X.
Rocha expects the trend to continue if and when the case reaches the Supreme Court.
IGA Member Partners With Kalshi
While Rocha is vehemently opposed to sports prediction markets, one of the IGA’s member tribes has partnered with Kalshi.
The Tunica-Biloxi Tribe of Louisiana became the first tribe to formally announce a deal with the company last week. The tribe said the “new venture will focus on providing software for trading event contracts but may branch out into other offerings as opportunities arise.”
“This partnership represents exactly the type of opportunity Indian Country should be pursuing, where Tribes are owners, innovators and leaders, not just participants,” said Tunica-Biloxi Chairman Marshall Pierite in a press release.
Kalshi said it hopes the deal can be the start of more tribes collaborating with the company. CEO Tarek Mansour posted an open letter on X, noting, “The debate can no longer be reduced to prediction markets on one side and Tribes on the other. What’s clear is that regulated national infrastructure and Tribal entrepreneurship can develop together. One does not have to lose for the other to win.”
