Oklahoma tribal gaming group says prediction markets threaten compacts

The Oklahoma Indian Gaming Association has said sports prediction-market apps threaten tribal gaming exclusivity and the revenue that supports tribal government services in an Oklahoma dispute over platforms including Kalshi and Polymarket.

Matthew Morgan, the association’s chair, said the apps amounted to illegal Class III gaming and undermined both the Indian Gaming Regulatory Act and Oklahoma’s tribal-state compacts. The association said the products infringe tribal sovereignty and undermine revenue streams critical to tribal government programs and services.

The stakes are substantial. Under Oklahoma’s compacts, tribes pay the state a monthly exclusivity fee in return for the exclusive right to operate specified compacted games. State compliance data show collections reached about $221.1 million in fiscal 2025, up 5.2% from the prior year, on roughly $3.64 billion in revenue from Class III and table games.

At the end of that fiscal year, 33 tribes operated 138 compact-related Class III gaming facilities in Oklahoma. About $194.3 million of the annual exclusivity-fee revenue went to the 1017 Fund and $26.5 million to the General Revenue Fund.

Morgan said none of the association’s member tribes had signed agreements to offer Kalshi-backed sports prediction markets. His position comes as tribal views have become more visibly divided: earlier this week, as we reported, the Alabama-Quassarte Tribal Town in Oklahoma was among four tribal nations that announced Kalshi-powered prediction-market apps.

Sen. Bill Coleman said legislative talks over legalising conventional sports betting, including the place of tribal exclusivity, had stalled. If Oklahoma authorises sports betting while prediction-market platforms remain available, he said, those platforms would retain a competitive advantage because they are already operating while tribes are not.

Coleman said he did not know what state regulation could look like and expected lawmakers to await court decisions. He also raised concern that people under 21 could access prediction markets.

Kalshi has maintained that prediction markets are subject to exclusive federal jurisdiction. Its chief executive, Tarek Mansour, argued that tribal gaming is a destination and hospitality business, while prediction markets are digital financial exchanges involving positions on future events.

That jurisdictional question remains contested. In April, the Third Circuit held that Kalshi’s sports-related event contracts traded on its CFTC-licensed market were swaps under the Commodity Futures Trading Commission’s exclusive jurisdiction, and upheld an injunction blocking New Jersey enforcement. A tribal coalition seeking Supreme Court review has noted that the Ninth Circuit reached the opposite conclusion on whether the Commodity Exchange Act displaced the existing gaming regulatory framework.

The Oklahoma association’s warning reflects a wider challenge by tribes and states to sports-event contracts. A coalition of 145 tribes and tribal organisations has filed an amicus brief asking the Supreme Court to hear Flaherty v. KalshiEX, arguing that the contracts compete for revenue that funds tribal services while bypassing gaming regulations.