Language in the Ho-Chunk Nation‘s tribal compact with the state of Wisconsin was a key factor in a District Court ruling that allows its case against Kalshi to continue.
The Ho-Chunk Nation’s complaint alleges that Kalshi’s prediction market platform violates Indian Gaming Regulator Act by offering class III gaming – typically defined as “Nevada-style gambling,” including slot machines, card games, and sports betting – on tribal lands without tribal authorization.
The United States District Court for the Western District of Wisconsin is allowing the case to continue and denied Kalshi’s motion to dismiss. The Ho-Chunk’s request for an injunction was denied, though, meaning Kalshi and Robinhood‘s business in the state can continue for now and can continue to advertise that its contracts are legal in every state.
Compact language differs from CA
In denying Kalshi’s motion to dismiss the tribe’s IGRA claims, the Western District of Wisconsin pushed back on Kalshi’s supplemental authority regarding ruling rendered by the United States District Court for the Northern District of California.
Notwithstanding such ruling was issued in relation to a motion for preliminary injunction (and, therefore, analyzed under a heightened standard of judicial review), the Western District of Wisconsin found the California ruling unavailing on the basis that, in the California case, the tribal-state compact at issue only outlined what the tribes are permitted to operate and is silent as to what other entities can do on the Internet.
The tribal-state compact in Wisconsin, however, specifically prohibits operation of class III gaming by any entity other than the tribe itself (thus, providing a wider breadth of protection/authority to oversee class III gaming for the tribe).
Failed to prove irreparable harm from Kalshi
In August 2025, the Ho-Chunk Nation initiated legal action challenging Kalshi’s ability (directly and through its partnership with Robinhood) to offer prediction markets on its tribal lands. Specifically, the tribe’s complaint alleges:
- A violation of IGRA.
- A violation of the Ho-Chunk Nation’s Gaming Ordinance (enacted under IGRA).
- Racketeering activity based on wire fraud, operation of an illegal gambling business, and illegal transmission of wagering information in violation of the Wire Act.
- Infringement of the tribe’s sovereignty and interference with tribal self-governance.
- False advertising under the Lanham Act.
While the Northern District of California held that the tribes in that case were unlikely to succeed on its IGRA claims based on the language (or, lack thereof) of the tribal-state compact therein, the Western District of Wisconsin denied the Ho-Chunk Nation’s request due to the tribe’s inability to show irreparable harm.
Despite the tribe’s assertion that Kalshi’s operations will deprive it of gaming revenue and/or interfere with tribal sovereignty and rights granted under IGRA, the tribe failed to present any evidence that such harm was immediate, non-speculative, and/or otherwise incapable of being remedied via monetary damages. Moreover, the court did not feel it appropriate to interfere with the status quo “in light of the substantial legal and regulatory questions involved.”
What did Kalshi want?
Kalshi sought to dismiss the tribe’s IGRA claims for multiple reasons.
First, it claimed the Ho-Chunk Nation lacks ability to sue Kalshi under IGRA because Kalshi is not a party to the Tribal-State compact that allows the tribe to offer class III gaming and, thus, has not committed a breach or other act in violation of the tribe’s rights provided per IGRA. In rejecting this argument and concluding that the Ho-Chunk Nation possessed the “statutory right” to sue, the court noted that IGRA’s enforcement provision states that a tribe can bring “any cause of action” to “enjoin a class III gaming activity” conducted “in violation of any Tribal-State compact.”
Therefore, because (1) the court is required to accept the tribe’s allegations as true at the motion to dismiss stage and (2) the complaint plainly states that Kalshi is operating in violation of the tribe’s exclusive rights granted via tribal-state compact, the court held that the Ho-Chunk Nation had adequately alleged claims asserting its rights.
Another claim said IGRA does not provide a basis for a cause of action, because sports betting activities do not take place “on Indian lands” because Kalshi’s operations are headquartered in New York. The court rejected Kalshi’s position that IGRA applies only to “brick-and-mortar gaming facilities physically located on Indian reservations,” stating that the Supreme Court had previously held that gaming occurs based on where the participating users are physically located. The court additionally cited IGRA and other federal laws to support its finding that “internet gambling occurs at least in the place where the bettor places a bet.”
Finally, Kalshi claimed the Uniform Internet Gambling Enforcement Act or Commodity Exchange Act authorizes Kalshi’s operations, even if it occurs on tribal lands. The court rejected Kalshi’s reliance on either the UIGEA or the CEA as permitting its activities, stating: (1) nothing in the UIGEA prevents the tribe from pursuing its claim under IGRA, and (2) Kalshi failed to provide a persuasive argument that the CEA preempts or otherwise affects tribal authority under IGRA.
RICO/Lanham Act claims dismissed
Though the Ho-Chunk Nation’s IGRA claims remain, the court did dismiss the other causes of action raised in the complaint.
Specifically, (1) due to the various rulings regarding the legality of Kalshi’s platform, the court held that Kalshi’s claims of legality were non-actionable under the Lanham Act because “plaintiff’s allegations do not permit an inference that Kalshi’s advertisements are false, misleading or lacking a good-faith belief in the opinion’s truth,” and (2) because Kalshi and Robinhood “have acted openly, offering a federally-regulated, derivatives market to participants, and under at least a colorable argument that their activities are legal under the CEA as insulated by the CFTC,” the tribe’s complaint failed to show how either Kalshi or Robinhood acted with the necessary intent to defraud its users for the purpose of engaging in a criminal enterprise.
