The Gambling Wire: Kalshi Enters Tribal Prediction Markets as Polymarket, DraftKings Face Scrutiny
One Tribe moved into prediction markets just days after others won in court, while separate investigations put Polymarket and DraftKings under fresh pressure.
Friday and the weekend brought a first-of-its-kind Tribal prediction-market launch, two major investigative reports into leading operators and fresh legal developments in Washington and at the U.S. Supreme Court.
The Big Story: Tunica-Biloxi Becomes First Tribe to Launch Kalshi-Powered Prediction Market
The Tunica-Biloxi Tribe of Louisiana has become the first sovereign Tribal nation to launch a prediction-market app. The move contrasts with the approach taken by many Tribal governments and organizations challenging sports event contracts.
The Tribe launched SaltTrade Derivatives, which will use Kalshi’s exchange and infrastructure. SaltTrade will manage the app, branding, marketing and customer experience, while Kalshi will provide matching, clearing, custody and surveillance.
The announcement came two days after the Ninth Circuit handed Blue Lake Rancheria and Chicken Ranch Rancheria a significant victory against Kalshi, finding the Tribes were likely to succeed on their claim that sports-event contracts constitute Class III gaming under the Indian Gaming Regulatory Act (IGRA) when entered from Tribal lands.
Earlier that week, leaders from 17 Tribal organizations told CFTC Chairman Michael S. Selig that the agency’s rulemaking threatens Tribal gaming and sovereignty.
A day before the Tunica-Biloxi announcement, Tribal organizations were also granted permission to file an amicus brief supporting New York regulators in Novig v. New York, in which Novig seeks a preliminary injunction against state enforcement.
Tunica-Biloxi is instead positioning prediction markets as an economic development opportunity. In announcing the partnership, Kalshi CEO Tarek Mansour argued that “prediction markets and Tribal economic development don’t have to be at odds.”
Mansour said the structure gives the Tribal-owned business access to a federally regulated exchange with nationwide liquidity and could be particularly meaningful for Tribes that “haven’t benefited equally from the existing gaming economy.”
The Daily Wire
WSJ: Polymarket Faced Major Fraud, Compliance Problems
A new Wall Street Journal investigation reports that Polymarket U.S. struggled with significant fraud, compliance and product-control problems as the company pushed for rapid growth.
In February, one of the company’s payment processors at one point flagged more than 80% of the deposits it handled as fraudulent. Fraudsters also allegedly linked stolen debit cards to Polymarket accounts and attempted to move at least $10 million.
A second attack in July affected nearly 500 users after an engineering flaw allegedly allowed attackers using stolen personal information to access existing accounts and linked payment methods. Polymarket said it would cover customer losses.
Current and former employees told the Journal that they raised concerns with CEO Shayne Coplan. Coplan, however, pushed the company to keep growing and to deal with potential regulatory penalties later.
The Journal also noted that the CFTC is investigating Polymarket, with the regulator telling employees to preserve records related to the fraud attack and other matters.
NYT: DraftKings Used AI to Target Promotional Spending
Another investigative report, this time from The New York Times, found that DraftKings used machine-learning models to identify customers likely to lose more after receiving promotions, while declining to deploy similar predictive tools for users at risk of problem gambling.
The Times, which reviewed internal documents and interviewed more than 40 former employees, reported that one online casino model scored customers based on how much they were likely to lose per promotion. The report said DraftKings later developed similar techniques for sportsbook users.
Employees also built a model designed to identify gambling-related risk before customers reached an intervention threshold, but the project was shelved.
DraftKings Chief Responsible Gaming Officer Lori Kalani said the company determined that predictive risk scoring was insufficiently evidence-based and that its existing monitoring system was more appropriate. DraftKings also disputed that promotions target customers based on losses, saying they are directed toward sustained, engaged users.
Kalshi Loses Washington Reconsideration Bid
King County Superior Court Judge John McHale denied Kalshi’s motion to reconsider an amended preliminary injunction restricting its event-contract business in Washington, as first highlighted by gaming attorney Daniel Wallach.
Kalshi had argued, in part, that other prediction-market operators continued to operate in the state while its Ninth Circuit appeal remained pending. The injunction remains in place as the appeal continues.
Kalshi Seeks More Time to Answer New Jersey SCOTUS Petition
Kalshi has asked the U.S. Supreme Court for an additional 30 days to respond to New Jersey regulators’ petition for review.
Its brief in opposition is currently due Oct. 8, with Kalshi seeking an extension through Nov. 9. New Jersey filed its petition on Sept. 2, after the Third Circuit ruled in April that Kalshi’s sports contracts qualify as swaps and that federal commodities law preempts New Jersey’s gambling rules.
Prosecutors Identify 18 Pitches in Clase Gambling Case
Federal prosecutors identified 18 pitches they allege former Cleveland Guardians closer Emmanuel Clase manipulated as part of a sports-betting scheme. That includes one during the 2024 postseason, according to ESPN.
Clase and fellow pitcher Luis Ortiz are accused of providing advance information to bettors and intentionally throwing certain pitches outside the strike zone. Both have denied wrongdoing.
iDEA Roundtable Looks Ahead to 2027 iGaming Push
Lawmakers from Ohio, Virginia and Massachusetts discussed online casino legalization Friday during an iDevelopment and Economic Association roundtable focused on revenue, cannibalization and consumer protections.
Ohio Rep. Brian Stewart and Massachusetts Rep. David Muradian introduced online casino bills in 2025, while Sen. Jeremy McPike played an active role in Virginia’s 2026 debate.
Stewart said projections suggest iGaming could eventually generate up to $400 million annually for Ohio. He also discussed limiting licenses to existing casinos and racinos while steering promotional benefits toward retail properties.
McPike cautioned against aggressive revenue assumptions and cited concerns about cannibalization, while Muradian argued that regulation could move consumers away from offshore or unregulated sites and generate tax revenue.
Stories to Watch
Prediction-market litigation will remain in focus this week. Two Tribal cases have confirmed hearings, starting Sept. 23, when four Tribes in New Mexico will ask a federal judge to preliminarily block Kalshi while the court also considers the company’s motion to dismiss.
A day later, a California district court will hold a status conference and hear two tribes’ pending motion to amend their complaint and add another party, with the preliminary-injunction dispute also returning to the lower court after the Ninth Circuit’s remand.
Elsewhere, Novig’s reply in support of its preliminary-injunction request against New York regulators is due Sept. 24.
Two other states to watch in the broader prediction market legal battle are Missouri and Kentucky. Last week, Missouri Attorney General Catherine Hanaway told a local outlet that her office is preparing to issue cease-and-desist letters to prediction market companies.
Hanaway also said Kentucky regulators were close to some form of settlement with prediction-market operators. In June, Kentucky sued Kalshi and Polymarket, after which the CFTC sued the state. No public details of any settlement have emerged.
Connecticut and New York also remain on watch as developments could emerge at any point. Reports last week suggested that some prediction markets have complied with Connecticut’s cease-and-desist letters while Underdog sued the state.
Outside prediction markets, the Indiana Gaming Commission meets on Sept. 24 and is scheduled to consider the NCAA’s request to prohibit college-athlete proposition bets. The commission had been expected to take up the issue in June, but postponed the discussion.
More August sports betting figures are also likely this week. Massachusetts, Tennessee, Connecticut, Louisiana and North Carolina released their July figures between Aug. 20 and 28.
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