The Ho-Chunk Nation can move forward with its lawsuit against the prediction market platform Kalshi under the Indian Gaming Regulatory Act (IGRA), after a federal judge narrowed the case but did not dismiss it.
U.S. District Judge William M. Conley of the Western District of Wisconsin denied the tribe’s request for a preliminary injunction to block Kalshi’s operations on tribal lands while litigation continues. He dismissed claims under the Lanham Act and the Racketeer Influenced and Corrupt Organisations Act (RICO), but allowed the IGRA claim to proceed. Robinhood, initially named as a defendant, has been dropped from the suit.
IGRA’s role in tribal gaming
IGRA was enacted in 1988, and it oversees gambling on tribal lands, balancing tribal sovereignty with federal and state oversight. It is the cornerstone of tribal gaming law, creating the basis on which tribes operate casinos and negotiate compacts with states.
For Judge Conley, IGRA commands Class III gaming and must be interpreted in favour of tribes when ambiguities arise. He also cited Montana v. Blackfeet Tribe of Indians (1985), where he highlighted that statutes affecting tribes should be “construed liberally in favour of the Indians.”
Conley then concluded that Kalshi’s sports betting contracts qualify as Class III gaming, violating the Ho-Chunk Nation’s Tribal-State compact and Gaming Ordinance when offered without authorisation.
Sovereignty and legal context
Tribal sovereignty in the U.S. refers to Native American tribes’ inherent authority to govern themselves. Recognised as “domestic dependent nations,” tribes maintain a unique government-to-government relationship with the federal government, a form of nationhood that predates the U.S. Constitution and continues today.
The Ho-Chunk Nation is expanding its gaming footprint with a massive new casino and resort in Beloit, Wisconsin. It is scheduled to open on 26 September of this year and will feature 1,500 gaming machines, 40 table games, a sportsbook, restaurants, and eventually a 312-room hotel and convention centre, making it the second-largest casino in the state, according to several media reports.
Partial wins for both sides
Both sides have gained partial wins. For the Ho-Chunk Nation, they have secured the right to pursue their central IGRA claim, while Kalshi avoided litigation under the Lanham Act and RICO. Federal judges in California, Nevada, and New Jersey have similarly rejected such claims, though a Maryland judge previously allowed a Lanham claim to proceed. Tribal attorneys welcomed the narrowing of the Wisconsin case, arguing that Lanham and RICO claims risked distracting from the core IGRA issue.
Broader circumstances
Tribes in California have also filed suit against Kalshi, alleging violations of the Lanham Act. However, judges there noted that Kalshi’s adverts appeared to be in good faith. In Wisconsin, tribes have expanded into retail sports betting since 2021, while the Ho-Chunk Nation launched its operations in 2024.
Governor Tony Evers recently signed legislation that allows online sports betting, giving tribes the right to negotiate exclusivity with the state. Meanwhile, Wisconsin’s attorney general has separately sued Kalshi, prompting a counteraction from the Commodity Futures Trading Commission (CFTC), which regulates prediction markets under the Commodity Exchange Act (CEA).
IGRA vs. UIGEA vs. CEA
Judge Conley rejected Kalshi’s argument that the Unlawful Internet Gambling Enforcement Act (UIGEA) or the CEA preempted IGRA. He clarified that UIGEA is a “non-substantive payment-processing law” that explicitly does not supersede IGRA. Even if Kalshi’s contracts are considered “swaps” under CFTC jurisdiction, Conley ruled that this does not strip tribes of their authority under IGRA to regulate gambling on their lands.
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