Ho-Chunk Nation Files Federal Suit Against Kalshi Over Tribal Gambling Violations
Ho-Chunk Nation Initiates Legal Battle Against Kalshi
The Ho-Chunk Nation has launched a federal lawsuit targeting the online trading platform Kalshi and its partner Robinhood Markets. The tribe accuses the companies of conducting unauthorized sports betting operations on tribal lands, violating federal and tribal laws. This complaint, filed in the Western District of Wisconsin, highlights growing tribal opposition to Kalshi’s expanding prediction market business, following earlier legal actions initiated by several California tribes.
Allegations of Tribal Gaming Compact Breaches
Kalshi brands itself as a financial exchange that allows users to buy and sell contracts based on the outcomes of various real-life events, including sports results and elections. Recently, it integrated its services with Robinhood’s platform. Kalshi argues that its offerings are regulated under the Commodity Exchange Act (CEA), which governs derivative markets.
However, the Ho-Chunk Nation disputes this classification, asserting in an 89-page legal filing that Kalshi’s sports event contracts closely resemble traditional sportsbook services. The tribe claims these offerings qualify as Class II gaming activities under the Indian Gaming Regulatory Act, which grants tribes exclusive rights over gambling on their lands via specially negotiated compacts with states.
“Thousands of high school students, including those living on reservations, are actively engaging in betting on numerous sporting events globally through mobile devices.”
Statement from the Ho-Chunk Nation
This lawsuit follows a previous case filed in federal court in California by a coalition of tribes that accused Kalshi and Robinhood of disguising illegal sports betting as event trading. The tribes emphasize that such practices threaten tribal sovereignty and violate federal statutes.
Growing Legal Challenges for Prediction Market Platforms
The Ho-Chunk Nation argues that Kalshi’s sports-related contracts fall outside the protections of the CEA and should be prohibited on or near tribal lands. Multiple tribes have expressed concerns that these prediction market activities operate in legal gray areas, potentially undermining tribal gambling enterprises and jeopardizing essential revenue sources for their communities.
“The tribe requests the court to issue an injunction preventing Kalshi from operating its unlawful sports betting activities on tribal lands permanently.”
Ho-Chunk Nation Statement
Kalshi is currently facing several regulatory and legal disputes, including challenges from Maryland and Nevada gaming authorities. Robinhood has also initiated lawsuits against regulators in New Jersey and Nevada who have aimed to block their offerings.
This latest legal action from the Ho-Chunk Nation intensifies pressure on Kalshi as it navigates regulatory scrutiny while attempting to grow its market presence. Despite backing from notable figures like Donald Trump Jr., Kalshi’s business model confronts increasing examination as the rising popularity of prediction markets continues amidst ongoing legal uncertainties.
