Prediction markets are becoming an issue for Native American tribes who argue they’re threatening their gaming revenues and their ability to fund vital services. At a recent legislative hearing, tribes and state lawmakers looked at taxing them.
Prediction markets like Kalshi and Polymarket are online platforms where people wager bets on an outcome around future real-world events, like sports or elections.
But because of the way they’re regulated they don’t usually pay taxes to states. Tribal gaming in New Mexico, however, contributed over $151 million to the state’s general fund in the last fiscal year.
Tribes also fear that prediction markets will lead people away from gambling in tribal casinos to online markets, which people can access on their phones while on tribal lands. And tribal officials said that’s a violation of the gaming rights they negotiated with the state as sovereign governments. Tribes also use those revenues for things like early education programs, housing, and healthcare.
During a meeting Tuesday of the Indian Affairs Interim Committee, Eugenia Charles-Newton, Navajo Nation Council Delegate and Chair of the Naabik'íyáti' Gaming Subcommittee, described how prediction markets are also targeting minors to bet.
“Right now, with prediction markets, we know that a 10-year-old standing next to the sheep camp, they can go onto a website and they can wager a bet,” she said.
Prediction market websites are classified as federal financial exchanges rather than traditional gambling platforms, which allows them to market to people 18 and older. With weak age verification, underage betters have been reported making wagers.
Prediction markets currently exist in a legal gray area and gaming officials want the state to tax them.
But lawmakers on Tuesday raised concerns. Those include whether taxes would affect current gaming compacts, how online activity would be tracked on tribal lands, and who would collect revenue.
The Mescalero Apache, along with Isleta, Pojoaque, and Sandia pueblos are suing Kalshi. The New Mexico Attorney General also filed suit in June 2026. They’re among a number of lawsuits across the country against the platforms. In response, the federal government is suing New Mexico to block the state from enforcing its gambling laws against prediction markets.
Support for this coverage comes from Thornburg Foundation.
