American tribes’ relationship with Kalshi seems to be worsening, despite Kalshi’s earlier attempt to extend an olive branch. Tribal entities continue to oppose the idea that sports-themed event contracts are something that should be treated differently than traditional betting and accuse prediction markets of violating tribal rights.
Kalshi Sought to Improve Its Relationship with US Tribes
Kalshi’s CEO, Tarek Mansour, has reportedly tried to ameliorate his team’s relationship with tribal entities, only to be met with hostility. This comes as the legal standing of prediction markets remains somewhat hazy, with prediction market platforms claiming that they offer CFTC-regulated financial instruments, and tribal operators and regulators insisting that their products are no different from unregulated gambling.
For reference, the “regulated by the CFTC” badge effectively allows prediction markets to offer their products in states that do not currently allow commercial betting. Because of that, tribal authorities continue to argue that such products hurt their communities.
Despite the seemingly insurmountable differences in opinion between Kalshi and the tribes, Mansour has previously tried to convince Victor Rocha, chair of the Indian Gaming Association (IGA), to join Kalshi as an advisor. Rocha, however, was quick to decline.
Rocha Grew Increasingly Displeased with Kalshi
Speaking to the New York Post, Rocha commented on his experience in dealing with Kalshi. According to him, Mansour’s offer was simply an attempt to “reduce him to a token cigar store Indian.” Rocha asserted that Kalshi doesn’t actually care about helping tribes and is simply focused on securing a tribal ally in order to divide the broader tribal community.
Shortly after the initial talks between Mansour and Rocha, the two met again, this time in a video call. After the previously unreported call, Jason Giles, executive director of the IGA, said that he was displeased by Mansour’s attempt to bond with tribal executives by leveraging generational trauma. For reference, Mansour addressed tribes’ past persecution, as well as the hardships he has faced as a Lebanese Christian.
Rocha was quite angry with some of Mansour’s statements, saying that Mansour pretended to understand historical context that he didn’t truly get. The IGA chair added that many of what the tech leader said felt insincere.
Speaking to the New York Post, Giles said that he was also wary of Kalshi’s real intentions during the call.
There was a lot of doublespeak and euphemisms they were using which raised red flags right away. We realized, ‘Oh my gosh, these guys are a huge scam.’
Jason Giles
Giles said that it was at that moment that he became extra suspicious and started warning other tribes.
Rocha’s relationship with Mansour deteriorated further when an agreement to host a webinar fell through. Rocha then proceeded to lambast Kalshi and refer to Mansour as a “lying little twerp.”
Kalshi Was Similarly Frustrated with Tribal Entities
At the same time, Kalshi has also experienced some frustrations with American tribes. Among other things, the platform insisted that tribes are not the underdog that they insist on being, considering that the tribal gaming revenue for the previous year reached $46 billion.
According to the New York Post, Kalshi has accused tribal gaming officials of growing “fat and happy” in their multi-million-dollar estates.
On the topic of the webinar, Sara Slane, head of corporate development at Kalshi, said that the tribes seem to have already made up their mind and implied that they do not actually wish to discuss the matter in good faith.
Kalshi Continues to Clash with Tribes and Regulators
In any case, the legal battle between Kalshi and American tribes turned out to be inevitable. Since the previously unreported attempts at mutual understanding, tribes and Kalshi have been locking horns over the legality of prediction markets.
Kalshi, in particular, has faced tribal lawsuits in California, New Mexico and Wisconsin, adding to the broader pushback against the event contracts space. A recent development in California allowed Blue Lake Rancheria and Chicken Ranch Rancheria tribes’ lawsuit to advance.
In other news, the 6th US Circuit Court of Appeals in Cincinnati ruled that Ohio and Tennessee can apply their gambling laws to prediction markets, dealing another blow to Kalshi.