The CFTC’s Transparent Attempt to Divide Indian Country
Today the CFTC released a Staff Letter that once again exposes their bias and favoritism towards the very industry they purport to regulate.
The aptly named CFTC Letter “No-Action Position To Providers of Passive Software” is intended to benefit crypto wallet providers and blur the line between traditional Introducing Brokers (IB) and passive software providers. Not surprisingly, the CFTC is trying 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).
Chairman David Bean commented: “Commissioner Selig is acting alone to gut the Commodity Exchange Act and disregard the protections Congress enacted for America’s agricultural community. Rather than engage with the Tribal agricultural community on real issues, he is seeking to divide a united Tribal gaming community by offering false outreach in the form of rounding up tribal gaming customers and directing them to existing prediction market platforms. Indian Country rejects the CFTC’s cynical attempt, and we continue to urge the agency and Congress to respect tribal sovereignty, the Indian Gaming Regulatory Act, and hundreds of existing tribal-state compacts – all of which are being violated by the CFTC’s actions. There is nothing in this CFTC Staff Letter that would benefit tribal economies, it would only benefit crypto wallets, Kalshi and other Prediction Market companies’ bottom lines.”
The timing of the CFTC Staff Letter comes on the heels of mounting prediction market losses in Federal Court and increasing pushback by State and Tribal governments, including most recently the State of Texas. Further, Tribal Nations secured a 9th Circuit ruling just yesterday that states prediction markets are likely violating the Indian Gaming Regulatory Act (IGRA) and operating illegally on Indian lands. In addition, the crypto industry has been setback by the U.S. Senate’s failure to advance H.R. 3633, the Digital Asset Market Clarity Act, a bill in which prediction markets attempted to create a backdoor mechanism for prediction markets to continue to operate if they lose in the Supreme Court.
“Tribal Organizations met with the CFTC this week in an attempt to engage in meaningful discussion about the CFTC’s proposed rule and position on prediction markets. Instead, Chairman Selig sat mostly silent and refused to discuss his proposed rule allowing sports bets on agricultural DCMs. Mr. Selig could have raised this Staff Letter that he claims some Tribal Nations are interested in. We had reason to doubt his words after his Senate testimony when he promised to let the court cases play out on their own. Now we know not to trust him and the CFTC,” Bean said. “The right thing to do now is to postpone the proposed rule, withdraw this unlawful Letter that violates the CEA and CFTC’s own regulations, and engage Tribal Nations with meaningful government to government consultation.”
SOURCE: Indian Gaming Association