IGA Chairman David Z. Bean: The CFTC and SEC sent coordinated messages to the Crypto and Prediction Market Industries that despite the Clarity Act’s Failure To Advance, their Agencies are willing to suspend enforcement of existing rules under the banner of “Innovation Exemption”

WASHINGTON, D.C. – Sept. 21, 2026 – Last week, the CFTC and SEC both released statements that once again exposed their bias and favoritism towards the very industries they purport to regulate. 

The CFTC announcement was made in conjunction with much fanfare about a Tribal Nation agreeing to waive their sovereign immunity and partner with Kalshi on their prediction market platform. 

The CFTC is trying to sell their guidance as a tribal fix, but not surprisingly the main beneficiaries will be prediction market applications that already have consumer reach. The prediction markets are hoping that by having the CFTC look the other way, they can create a user interface for customer orders on Facebook, TikTok, Instagram, and tribal casino websites that routes their customers to prediction markets for a fee. This is not a business model that would benefit Indian Country, it will only allow prediction markets to leverage social media and tribal casino platforms to provide more entry points for their product.

The CFTC announcement on relaxing regulations for entities that under existing law must register as a Broker, is only going to make it easier for prediction markets to gather up customers from agents that would not have to be registered as licensed Brokers under the Commodities Exchange Act (CEA).  In a similar move, the SEC announced it is going to allow non-custodial platforms to attract stock orders (ie..tokenized stock trading) without registering at the SEC. 

Probably the most disturbing aspect of the CFTC Staff Letter that was not highlighted by the agency is the requirement that passive software providers (PSPs) that are affiliated with tribal governments “shall include a waiver of sovereign immunity” to help enforce the PSPs consent to the CFTC’s jurisdiction to investigate and enforce against potential violations. (See CFTC Staff Letter at footnote 22).

Finally, the CFTC also completely fails to acknowledge the significant litigation risk for any Tribal Nation that agrees to affiliate with a PSP working with a prediction market. On Wednesday, September 16th , the Ninth Circuit held that prediction market contracts relating to the outcomes of sporting events are Class III gaming under the Indian Gaming Regulatory Act. The court found that tribal governments can bring suit against prediction markets acting on Indian lands to enforce their tribal gaming ordinances under the Indian Gaming Regulatory Act. 

Tribal and state governments nationwide will continue to protect their sovereignty and enforce their laws against the illegal intrusion of prediction markets that offer nationwide online sports gambling. 

Regarding these latest developments, Indian Gaming Association Chairman David Bean stated, “The CFTC and the SEC’s coordinated effort to end run the Clarity Act is only unifying our opposition to prediction markets and providing new allies in this cause.  Just recently the 9th Circuit issued two opinions skeptical of the ‘sports bets as swaps’ argument the CFTC is pushing.  Attempting to hide behind a Tribal Nation and pushing them forward as an example of innovation only exposes Commissioner Selig’s cynical aims to protect a clearly illegal betting platform. His timing could not be worse as they lose court case after court case and the prediction market industry is embroiled in cover ups over the actual size of its customer base and how much of their handle is just bots placing the same bets continuously.  

It is now clear that only Congressional action will roll back the unauthorized and illegal coordination by the CFTC and SEC.  Indian Country will expand our messaging side by side with the banking and equity trading communities that are equally shocked at this level of administrative lawfare and favoritism towards the crypto community.  There is nothing in the CFTC’s work around for Tribes that benefits tribal economies, it will only benefit prediction markets and allow unregulated sports betting to flourish, as the prediction markets say “in all 50 States.” Kalshi and the like will use your customer lists and tribal sovereignty to simply add more money to their CEOs pocket books. This fight is far from finished, but together, Tribal Nations will see this battle to its successful end.”