As expected, prediction markets dominated the conversation at last week’s 2026 Indian Gaming Tradeshow and Convention in San Diego.
In recent months, prediction markets have flourished in tribal hotbeds such as California and Florida, prompting Indian gaming officials to deem the asset class as a threat to tribal sovereignty. The valuations of two operators, Kalshi and Polymarket, have soared in 2026, raising further concerns among tribal leaders on future growth prospects of the trading platforms. At one session, IGA Chairman David Bean cautioned that legal rulings will take precedence over public opinion in the contentious issue.
Shortly after the conference ended, a ruling in the US 3rd Circuit Court of Appeals served as a setback for tribal gaming interests. In a 2-1 decision, the appellate court ruled that the state of New Jersey will be unable to temporarily block Kalshi from offering sports event contracts in the Garden State. While in San Diego, Jason Giles, executive director for IGA, indicated the appeal is one of many cases that the organisation is monitoring.
Last November, in the case Blue Lake Rancheria vs Kalshi, a California District Court rejected the argument that the Indian Gaming Regulatory Act overrode the Unlawful Internet Gaming Enforcement Act, a closely-watched 2006 internet gaming law. Despite an unfavourable ruling in that case, Giles has largely been pleased with states’ track record in early court decisions against the prediction market-operator
Giles is focused more intently on the efforts of states to mobilise a protracted battle against prediction markets. To date, the operators are facing lawsuits in more than a dozen states.
“Anywhere they’re operating, they’re going to be sued,” he told iGB. “The states are now finally waking up to it.”
AML cases remain relevant one year later
For the second consecutive year, the comprehensive money laundering scandals on the Las Vegas Strip played an integral role on panels associated with compliance and enhanced due diligence. Lax anti-money laundering protocols at numerous Strip properties enabled a host of illegal bookmakers to wash illicit proceeds through the retail casinos.
Nevada regulators responded by issuing multi-million fines against at least four entities – Resorts World Las Vegas, Wynn Resorts, Caesars Entertainment and MGM Resorts – two of which also completed non-prosecutorial agreements with the Justice Department. The settlements have resulted in dramatic upgrades in how Strip properties have approached AML and Know-Your-Customer policies for vetting suspicious customers.
At last year’s tradeshow, several panels delved into the subject, including one that focused on the balancing act between effective compliance and the reduction of burdensome costs. At the time, illegal bookmaker Matt Bowyer awaited sentencing on several charges, most notably transactional money laundering. Since then, Bowyer spent five months in federal prison and was added to the exclusion list, or “black book”, that bans him from entering a licensed Nevada casino. Bowyer is the bookmaker who accepted $325 million in sports wagers from Ippei Mizuhara, Shohei Ohtani’s ex-interpreter.
Bowyer garnered headlines last month when he was transferred to a halfway home in Southern California before serving half of a sentence scheduled to last approximately 12 months. Two other bookmakers, Damien Leforbes and Wayne Nix, are awaiting sentencing. In addition to the Las Vegas casinos, Bowyer also frequented Pechanga Resort Casino in California, per ESPN. Mizuhara, according to ESPN, repaid debts to a Bowyer associate who allegedly sent the funds to his marker accounts at Pechanga. To date, Pechanga has not been charged in relation to the bookmaker.
Compliance in the AI era
At one panel dedicated to the intersection of compliance and data protection, Druvstar’s Melissa Aarskaug discussed the presence of unrecognisable “blind spots” that should be corrected to ameliorate a property’s compliance solution. She moderated a panel titled “From Compliance to Connection: Turning Clean, Traceable Data Into Security and Smarter Player Engagement”.
Aarskaug, who serves as executive vice president of strategy and growth at Druvstar, used real-world examples of cases in other industries to illustrate the challenges a casino can encounter when certain vulnerabilities are ignored.
One recent case impacted Stryker Corporation, a Fortune 500 medical device company. On 13 March, Stryker disclosed that the company responded to a disruption to its Microsoft environment, as a result of a destabilising cyberattack. According to Check Point Research, a cyber threat intelligence provider, Iranian group Handala Hack claimed responsibility for the breach that wiped data from approximately 200,000 Stryker “systems, servers and mobile devices”.
In response, Stryker employees filed multiple federal lawsuits against the Michigan-based company claiming that its negligent security protection resulted in the extraction of sensitive personal data. The hackers, Aarskaug noted, obtained data from employees on personal tasks and even pictures of family members. As it relates to the casino industry, she explained that the breach identifies the challenges that ensue when litigation comes from the employee level rather than a regulatory matter.
In an AI world, human interaction remains critical
The panel, on 1 April, was not the only one at IGA that addressed the intersection between AI, security and compliance. A day earlier, a pair of security experts examined how unified data environments enable predictive risk intelligence, support fraud and AML monitoring as well as tackle key governance concerns. Despite the proliferation of AI, there are still some hiccups in the system that need to be corrected, panelists indicated.
On one hand, the tools available to operators for detecting nefarious activity – through facial recognition, voice recognition and licence plate monitoring – have never been more sophisticated. On the other, the surveillance tools can be rendered obsolete if disparate casino divisions cannot communicate effectively.
In one example, a host could inform his supervisor at a marketing division that one of his clients appears to be an illegal bookmaker. However, if the marketing team does not relay the suspicions to the compliance department, the case may go undetected.
Andrew Cardno, chief technology officer at Quick Custom Intelligence, explained that detection is not as easy as it appears. When a casino employs dozens of monitoring systems simultaneously, the complexity of real-time systems integration may amount to an unsolvable problem, Cardno told iGB.
“There is a perception of easiness,” he said. “Every time you add a system, you add connections to an existing system to get a real-time integration. So, to get 50 systems to integrate, is well into the realms of being impossible mathematically – you just can’t do it.”
Other topics at IGA
–During the early stages of IGA, a lawsuit filed by Arizona Attorney General Kris Mayes generated considerable discussion. Last month, Mayes filed a lawsuit against Kalshi for operating an unlicensed gambling enterprise. All 20 of the charges against Kalshi are misdemeanours. The suit represents the first time Kalshi faced criminal charges nationwide.
Martin Harver, president of the Salt River Pima Maricopa Indian Community in Arizona, is concerned that the state will lose a significant amount of tax revenue from the expansion of prediction markets. Harver is just as concerned that prediction market-operators do not have robust age verification systems in place. The lack of controls allows individuals under 21 to trade sports event contracts.
“They don’t know how old someone is when they place a bet,” Harver told iGB.
IGA leaders also announced that they have launched a CFTC litigation fund for defending tribal sovereignty against the rise of prediction markets. The leaders did not disclose a funding target or any specific lawsuits that will use fund allocations.
“We’re months away from answering those a lot of those questions specifically, but we do recognise the need to have a litigation fund when we’re up against these guys with billions of dollars,” the IGA’s Giles said.
A series of sweeping reforms took effect last week that ban the traditional form of blackjack across card rooms in California. The new regulations provide a boon for tribal entities which have pushed for the restrictions for years.
“We firmly believe that the games they’re offering were illegal house-banked games, which is in violation of our exclusivity, our sovereignty,” James Siva, chairman of the California Nations Indian Gaming Association, told iGB.
Matt Rybaltowski
Matt is primarily responsible for long-form feature coverage on complex sports betting scandals. He also provides coverage on finance, M&A and other technological developments.
