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Two Ojibwe nations in Minnesota asked federal regulators to drop a proposed rule they say would bring online sports betting to reservation land without tribal permission.  

The Leech Lake and Mille Lacs bands of Ojibwe filed letters last week with the Commodity Futures Trading Commission against a rule defining the word "gaming" as any activity that people do for fun that turns on chance, skill or athletic ability.   

The rule also lays out how the commission decides which prediction markets can operate and requires it to take an additional step to determine if a contract harms the public. The commission decided most sports contracts do not threaten public interest.  

In their letters to the commission, both tribes said the proposed rule would hand a single federal agency control over sports betting nationwide, pushing tribal and state regulators aside. A 1988 federal law gives tribes authority over gaming on their own land, with casino-style gaming governed by compact agreements between tribes and states. 

Prediction markets are apps and websites where people can gamble on whether something will happen. The companies running the markets say what they offer is a financial trade — similar to a stock future — not a bet.  

That difference decides who oversees prediction markets. Financial trading falls to the federal futures trading commission.  

The new rule would have the practical effect of allowing sports betting on a phone anywhere in the country, including reservation lands. Benjamin Swankier, general counsel for the Leech Lake Band of Ojibwe, said the tribe is opposed to that. 

"This is an ongoing debate that must take place at the local level," Swankier wrote. 

Swankier said the band is concerned tribal youth may be harmed by the availability of prediction market apps that mirror sports betting apps. 

Leech Lake runs three casinos and has regulated gaming on its reservation in northern Minnesota for three decades. The Mille Lacs band oversees its gaming operations at Grand Casino Mille Lacs and Grand Casino Hinckley. 

Mille Lacs Band chief executive Virgil Wind said in the band’s letter prediction markets amounted to gaming. The tribe relies on gaming revenue to fund social services, in lieu of a tax base, he said. 

Both letters pointed to federal policy requiring agencies to consult with tribes on rules that would affect tribal gaming operations, which they said the commission did not do. Both asked the commission to meet before going further. 

The tribes' comments were among more than 1,400 submitted to the agency. A 45-day comment period on the proposed rule closed Monday.  

The agency can finalize the rule, rewrite it, or withdraw it. A final rule would take effect 60 days after publication. 

a federal judge on Monday paused a new Minnesota law banning prediction markets

 while a lawsuit brought by the federal government proceeds. The state law would make it a felony to host or advertise a prediction market. 

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A federal proposal would set the rules for prediction markets nationwide. Two Minnesota bands say it sidesteps their authority to regulate gaming on their own land.

The prediction market app Kalshi is displayed on a mobile phone

Tribal nations in Minnesota push back on federal proposal for prediction markets

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