Ho-Chunk Nation to Battle Kalshi in Court After Ruling

^{The Ho-Chunk Nation will get its day in court and continue the fight against Kalshi in Wisconsin. (Photo: Alex Garland / Alamy)}

A ruling in the U.S. Court for the Western District of Wisconsin will allow the Ho-Chunk Nation to proceed with its lawsuit against Kalshi, denying a motion from the prediction market to dismiss the suit.

The case follows the pattern of the ongoing legal battles between regulators and prediction markets over whether the platforms are subject to regulation from authorities other than the Commodity Futures Trading Commission (CFTC), but has unique aspects due to questions regarding the sovereignty of a Native American tribe.

Ho-Chunk Say Lawsuit is a Fight for Sovereignty

In the Ho-Chunk Nation complaint, the tribe invokes the Indian Gaming Regulatory Act (IGRA) of 1988, as well as the tribe’s gaming compacts with the state of Wisconsin and the U.S. Department of the Interior.

The Ho-Chunk Nation first filed a complaint in November, seeking to prevent Kalshi from offering sports-based contracts on tribal lands. While the court has thus far denied requests for a preliminary injunction, it has signaled that it believes there is merit to the tribe’s arguments.

“Although plaintiff has shown a likelihood of success on the merits of their IGRA claim, its motion for a preliminary injunctive will be denied because plaintiff has not shown irreparable harm absent such relief,” Monday’s order stated.

In its complaint, the Ho-Chunk Nation argues that its compacts give it the exclusive rights to authorize Class III gaming on its lands. It also claims that Kalshi’s event contracts should be classified under that Class III gaming title.

Kalshi, on the other hand, says that its contracts are offered under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC), and that the IGRA was never intended to regulate financial products such as derivatives and swaps, which were given federal oversight by the Commodity Exchange Act.

Tribal leaders called Monday’s ruling a win for tribal sovereignty, and vowed to continue fighting their case.

“The Ho-Chunk Nation has consistently maintained that tribal governments retain the sovereign authority to regulate gaming within our jurisdiction,” Ho-Chunk Nation President Jon Greendeer said in a statement. “This decision confirms that tribal sovereignty and IGRA protections do not disappear simply because private entities attempt to rebrand gambling.”

Case is ‘Larger Than One Tribe’

This isn’t the first time that tribes have clashed with Kalshi and other prediction markets. In both California and Tennessee, tribes failed to convince courts to issue injunctions against Kalshi. A coalition of 16 federally recognized Indian tribes, along with the Indian Gaming Association and several other Native American groups, has requested to file amicus briefs in the Ho-Chunk Nation case.

“This case is larger than one tribe or one company,” Greendeer said. “It concerns the future of tribal regulatory authority in the digital age and the continued strength of IGRA as a cornerstone of tribal self-governance and economic self-determination.”

Prediction markets are under fire in Wisconsin, even outside of tribal borders. In April, Wisconsin Attorney General Josh Kaul filed three lawsuits in an effort to stop several prediction markets from offering what he alleged was illegal sports betting in the state. The CFTC responded by suing Wisconsin in an effort to halt Kaul’s lawsuits.