Federal judge lets Ho-Chunk Nation pursue core Kalshi betting lawsuit claims

Suswati Basu

 

A federal judge in Wisconsin is allowing the Ho-Chunk Nation to continue pursuing its central claims against prediction market operator Kalshi, keeping alive a closely watched fight over whether sports event contracts amount to illegal betting on tribal lands.

In Monday’s ruling (May 11), U.S. District Judge William Conley said the lawsuit “principally concerns the ability of plaintiff Ho-Chunk Nation, a federally-recognized Indian tribe, to prohibit online sports betting from occurring on its tribal land.”

The dispute focuses on Kalshi’s online event contracts, which let users trade on sports outcomes and other real-world events through a market regulated by the Commodity Futures Trading Commission. Robinhood has partnered with Kalshi to distribute some of those contracts through its own platform.

Ho-Chunk Nation tribal lawsuit in Wisconsin against Kalshi survives key dismissal challenge

The Ho-Chunk Nation argued that the contracts qualify as class III gaming under the Indian Gaming Regulatory Act because bettors located on tribal land can still access the platform without tribal approval. The tribe said that activity threatens its gaming compact and cuts into casino revenue that supports tribal government operations.

Conley agreed the tribe had plausibly stated a claim under IGRA. The opinion said Kalshi “does not appear to dispute” that its sports event contracts fit within class III gaming rules or that tribal users can access the offerings online.

The ruling also referenced a recent Arizona decision involving Kalshi. In it, another federal judge described the contracts as “sports wagers and everyone who sees them knows it,” while noting Kalshi markets itself as a “sports betting platform.”

Kalshi had pushed for dismissal by arguing that IGRA does not allow tribes to sue companies that are not parties to tribal-state gaming compacts. The company also argued that its New York headquarters and Ohio-based servers placed the activity outside tribal jurisdiction.

Conley rejected those arguments, writing that such a reading would leave tribes unable “to prevent illegal, non-tribal class III gaming operations on their lands.” He also concluded that gaming activity happens where the bettor is physically located.

Still, the court declined to immediately block Kalshi’s contracts while the case continues. The judge said the Ho-Chunk Nation failed to show urgent evidence of financial harm. According to the opinion, the tribe presented “no evidence showing: a measurable change in customer visitation or attendance numbers at its casinos; declines in consumer spending; changes in revenue or profitability at any of its casinos.”

Conley added that the court was “not persuaded that interfering with the status quo” was appropriate while broader legal questions surrounding federal commodities law remain unresolved.

The judge separately dismissed the tribe’s false advertising claims tied to Kalshi promotions calling itself “The First Nationwide Legal Sports Betting Platform” and saying sports betting is legal “in all 50 States on Kalshi.” Civil RICO claims against Kalshi and Robinhood were also dismissed.

Featured image: Kalshi / Ho-Chunk Nation

The post Federal judge lets Ho-Chunk Nation pursue core Kalshi betting lawsuit claims appeared first on ReadWrite.

ReadWrite

(4)