A high-stakes legal battle over the regulation of prediction markets is forging an unlikely alliance between commercial gaming companies, tribal nations, and labor unions—groups that have often clashed in the past. At issue is whether these platforms, which allow users to bet on everything from election outcomes to sports events, constitute illegal gambling or legitimate financial instruments.
The dispute has escalated rapidly, with multiple lawsuits filed by states, tribes, and the Commodity Futures Trading Commission (CFTC), and conflicting rulings from federal appeals courts. New Jersey has petitioned the Supreme Court to resolve the matter, drawing support from a bipartisan coalition of 39 state attorneys general, the American Gaming Association (AGA), and 145 federally recognized tribes.
An Unlikely Coalition
James Siva, chairman of the California Nations Indian Gaming Association (CNIGA), expressed astonishment at the newfound unity. "To see us sitting on the same side of the table advocating together is something I would have never thought would have happened," he said, referring to their collaboration with unions.
The alliance was on full display at the Global Gaming Expo in Las Vegas last month, where AGA President and CEO Bill Miller and Indian Gaming Association (IGA) Chairman David Bean shared the stage. Bean acknowledged the historically fraught relationship between commercial and tribal gaming: "We weren't always welcome in Las Vegas," he said, crediting former IGA Chairman Ernie Stevens for forging ties with the AGA.
A Technical Dispute with Big Implications
The core legal question is whether a wager on a future event should be classified as a "swap"—a financial instrument regulated by the CFTC—or as gambling, which has traditionally been regulated by states and tribes. Prediction markets argue they are swaps, and the CFTC has largely agreed, aggressively enforcing this stance. States and tribes counter that these platforms are nothing more than unlicensed gambling operations that bypass local laws.
This fight has also drawn in defense officials, with the Pentagon recently banning betting on military operations, highlighting the broader national security implications.
Labor Unions Join the Fray
Adding to the unusual nature of the coalition, labor unions—particularly UNITE HERE, which represents workers in the gaming and hospitality industries—have thrown their support behind the gaming industry and tribes. Despite a history of tensions, particularly in California, the unions see prediction markets as a direct threat to their members' jobs.
In June, UNITE HERE, along with the AGA and IGA, sent a letter to senators urging them to prohibit event contracts tied to sports and casino-style gaming. The letter warned that prediction markets have fueled "the largest expansion of gambling in U.S. history over the past 18 months—without voter approval or legislative authorization."
UNITE HERE President Gwen Mills appeared with Miller at the Global Gaming Expo, where he welcomed her as the "most recent addition to this formidable coalition." Chris Cylke, AGA's senior vice president of government relations, said it "wasn't a hard sell" to get unions on board, given that gaming companies are major employers with a high percentage of unionized workers.
Aamir Deen, an organizer with UNITE HERE, acknowledged the past friction but noted, "when it comes to prediction markets, there's a great deal of common ground between us and the entire industry."
What's at Stake
The outcome of this legal battle could reshape the landscape of online betting in the United States. If the Supreme Court rules that prediction markets are gambling, they would be subject to state and tribal regulations, potentially curbing their rapid growth. If they are deemed swaps, they would remain under federal oversight, allowing platforms like Kalshi and Polymarket to continue operating with minimal state interference.
The coalition's efforts have also caught the attention of political figures, with some pundits making bold predictions about the future of the Trump administration, adding a layer of political intrigue to the debate.
As the legal fight intensifies, the strange bedfellows are likely to remain united, driven by a shared concern that unchecked prediction markets could undermine both regulatory frameworks and the livelihoods of thousands of workers.
