A tribal nation is likely to succeed in blocking Kalshi from offering sports contracts on its land, a federal judge said in what appears to be the first ruling of its kind against the prediction market operator.
The Ho-Chunk Nation, a federally recognized Native American tribe, can move ahead with its lawsuit accusing the company of violating the Indian Gaming Regulatory Act, or IGRA, and has shown “a likelihood of success” in its complaint, US District Judge William M. Conley in Madison, Wisconsin, wrote in a ruling Monday.
The dispute centers on whether sports-related event contracts are gaming that can be regulated by states’ laws and federal tribal law, or financial instruments that fall under federal oversight. In a fast-moving nationwide Kalshi Will Return to Ninth Circuit, This Time Against Arizona, Kalshi has had mixed results arguing that it should be overseen by the Commodity Futures Trading Commission rather than state officials.
Conley’s decision marks a rare victory for a Native American tribe pressing claims against Kalshi under IGRA. A similar showdown is pending at a federal appeals court in California, where several tribes Kalshi Prevails Against Tribal Court Ask to Bar Sports Trading to win an injunction they sought in a lower court.
Earlier this year, several tribes sought to support Tennessee’s efforts to regulate Kalshi but a judge rejected their request to file a friend-of-the-court brief. The company went on to win a preliminary injunction blocking enforcement by Tennessee officials.
In Wisconsin, Conley faulted Kalshi’s interpretation of the tribe’s IGRA-required Tribal-State compact with regulators as “without basis in the text, legislative history or common sense.” Kalshi’s reading of the compact would have only allowed tribal nations and states to sue each other, rather than third parties.
Still, Conley denied the Ho-Chunk Nation’s request for a preliminary injunction against Kalshi because the tribe did not show “irreparable harm” if the company continued operating its exchange on a tribal tract of about 17 square miles while the court fight plays out.
The judge also dismissed the Ho-Chunk Nation’s claim that Kalshi and Robinhood Markets Inc. engaged in criminal activities in violation of the Racketeer Influenced and Corrupt Organizations Act.
