Kalshi Launches First Tribal Prediction Market as Polymarket and DraftKings Face Scrutiny
Key Takeaways
- Tunica-Biloxi announced the first tribal prediction-market app powered by Kalshi, while other tribes challenge event contracts in court.
- A Wall Street Journal investigation reported fraud and compliance problems at Polymarket, which pledged to cover customer losses.
- DraftKings disputed a New York Times report that it used AI to target promotions toward customers expected to lose more.
Kalshi has partnered with the Tunica-Biloxi Tribe of Louisiana on what the companies describe as the first tribal prediction-market app, opening a new commercial front as other tribal governments challenge event contracts in court.
The announcement comes as separate investigations raise questions about fraud controls at Polymarket and promotional targeting at DraftKings, adding scrutiny to an industry already navigating disputes over regulation and consumer protection.
Together, the developments highlight a widening divide between companies pursuing new markets and critics questioning how those businesses operate.
Tunica-Biloxi Enters Prediction Markets Through SaltTrade
The Tribe announced the venture through SaltTrade Derivatives, a subdivision of a tribal-owned enterprise, with Kalshi providing the underlying market infrastructure.
SaltTrade will oversee the app, branding, marketing, and customer experience, while Kalshi handles matching, clearing, custody, and surveillance, according to Gambling Insider.
The official announcement frames the partnership as an economic diversification initiative. Although described as a launch, it says additional platform and rollout details will follow in the coming months.
It also states that SaltTrade will rely on conditional no-action relief from Commodity Futures Trading Commission staff rather than register with the agency itself.
The arrangement contrasts with opposition elsewhere in Indian Country. The Ninth Circuit recently found that Blue Lake Rancheria and Chicken Ranch Rancheria were likely to succeed in arguing that sports-event contracts entered from tribal lands constitute Class III gaming under federal law.
Kalshi also faces continuing restrictions in Washington, where a judge rejected its request to reconsider a preliminary injunction while its appeal proceeds.
Polymarket Faces Reported Fraud and Compliance Problems
A Wall Street Journal investigation reported that Polymarket’s U.S. operation encountered significant fraud and compliance problems during its expansion.
One payment processor flagged more than 80% of the deposits it handled as fraudulent at one point in February. Attackers allegedly linked stolen debit cards to accounts and attempted to move at least $10 million.
A separate July incident reportedly affected nearly 500 users after an engineering flaw allowed attackers using stolen personal information to access accounts and linked payment methods.
Polymarket said it would cover customer losses.
The Journal also reported a CFTC investigation and instructions for employees to preserve relevant records. The reported allegations do not establish regulatory findings or liability.
DraftKings Disputes Claims About AI Promotion Targeting
Separately, The New York Times reported that DraftKings used machine-learning models to identify customers expected to lose more after receiving promotions.
The investigation, based on internal documents and interviews with more than 40 former employees, also described a shelved project intended to identify gambling-related risk earlier.
DraftKings disputed that it targets promotions based on customer losses, saying its offers focus on sustained, engaged users.
Chief Responsible Gaming Officer Lori Kalani said the company considered predictive risk scoring insufficiently evidence-based and viewed its existing monitoring system as more appropriate.
The competing accounts put a central question under scrutiny: how operators use customer data to expand revenue while identifying and addressing potential gambling harm.
