Three California tribes sued Kalshi and Robinhood Tuesday, calling for the prediction market’s sports event contracts to be blocked on tribal land. It is the first federal lawsuit filed against, rather than by, Kalshi.
The Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians filed the lawsuit in the U.S. District Court for the Northern District of California, asking for an injunction to block Kalshi from offering what they call “illegal sports betting” on their reservations.
The case concerns Kalshi’s sports event contracts, which are regulated by the Commodity Futures Trading Commission (CFTC) as “swaps.” This type of financial product allows users to wager money on a sporting outcome. Kalshi’s sports event contracts are also available on stock trading platform Robinhood.
The tribes argue that the availability of these contracts on their lands contravenes the federal Indian Gaming Regulatory Act (IGRA), as well as tribal compacts with the state of California.
“While masquerading as novel commodities and futures products, these event contracts are, substantively, nothing more than illegal, unregulated wagers on the outcomes of sporting events,” the tribes’ complaint said.
It cited examples of Kalshi’s marketing where the exchange was described as “The First Nationwide Legal Sports Betting Platform.”
Under IGRA, sports betting is a form of “Class III gaming,” which may only be offered on tribal lands if a tribe and state compact for it.
In addition, the tribes argue that Kalshi and Robinhood’s collaboration is in violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act, referring to the two companies together as “The Gaming Racket.”
“Beginning in February 2025, the Gaming Racket (through Robinhood’s platform and its integrated payment systems) has continuously used interstate wire communications to electronically collect deposits from users, process orders for gaming contracts, facilitate trades, and manage withdrawals of funds,” the complaint said.
“Each such instance of financial transfer has been conducted under the false pretense that it relates to legitimate commodity transactions stemming from valid self-certifications, rather than unlawful gaming contracts.”
The tribes called on the court to declare that Kalshi’s sports event contracts are illegal, block them from being offered on tribal lands, and award the tribes treble damages, costs, and attorney fees, including forcing the businesses to give up any “ill-gotten gains.”
Tribes ‘playing offense’
A number of federal courts have considered cases involving the legality of sports event contracts, but these have generally been lawsuits filed by Kalshi to block states from issuing cease-and-desist orders against the business. In Nevada and New Jersey, Kalshi has been able to win preliminary injunctions to at least temporarily stop those orders from being enforced.
This case, though, marks the first instance of Indian Country suing Kalshi in an attempt to block the business from offering its contracts.
Daniel Wallach, founder of Wallach Legal, argued the decision by tribes to “play offense” was a good strategy.
