A total of three tribal gaming groups: the Chicken Ranch Rancheria of Me-Wuk Indians, the Blue Lake Rancheria, and the Picayune Rancheria of the Chukchansi Indians, have filed a lawsuit against both Kalshi and Robinhood to stop them from offering betting on sports, at least in their reservations. Kalshi isn't a stranger to lawsuits, but this is the first time that the Indian Gaming Regulatory Act is front and center.

Three federally recognized Native American tribes in California have filed a federal lawsuit against prediction market platform Kalshi and trading app Robinhood, alleging the companies are illegally offering sports betting on tribal lands in violation of the Indian Gaming Regulatory Act. The complaint, lodged in the US District Court for the Northern District of California, marks the latest legal front in a growing controversy surrounding the classification and legality of Kalshi's so-called 'event contracts.'

The Blue Lake Rancheria, the Picayune Rancheria of the Chukchansi Indians, and the Chicken Ranch Rancheria of Me-Wuk Indians, are seeking a permanent injunction to prevent the companies from engaging in what they describe as unregulated Class III gaming within the boundaries of their reservations. If successful, the lawsuit could create a nationwide precedent affecting not only Kalshi's operations but also the wider debate over how online event trading intersects with gaming law in the US.

IGRA takes center stage in legal battle

While Kalshi has already faced regulatory challenges in several states for allegedly offering illegal sports betting, this lawsuit is distinct in invoking the Indian Gaming Regulatory Act. The tribes argue that Kalshi and Robinhood’s actions constitute Class III gaming - a category that includes sports betting - on Indian lands, which is strictly regulated under federal law.

"This is an action brought by three federally recognized Indian Tribes...to prevent [Kalshi and Robinhood] from engaging in illegal sports gambling on the Tribes' respective reservations," the complaint states.

Under IGRA, Class III gaming is only legal on tribal lands if it complies with a tribal ordinance approved by the National Indian Gaming Commission, is allowed by the state, and is conducted pursuant to a tribal-state compact. The tribes argue that Kalshi and Robinhood's contracts fail on all three counts and therefore violate both federal and state law.

Legal and financial stakes rise

The lawsuit asks the court for sweeping relief, including a declaration that Kalshi's sports event contracts are unlawful under both IGRA and the Commodity Exchange Act. The tribes are also pursuing claims under the Racketeer Influenced and Corrupt Organizations Act, asserting that Kalshi and Robinhood have engaged in systematic illegal gambling activity.

Among the remedies sought are:

  • A permanent injunction against Kalshi and Robinhood from operating on tribal lands
  • Treble damages, disgorgement of profits, and attorneys' fees
  • A declaration that Kalshi is impermissibly regulating Indian gaming commerce outside the scope of federal oversight

The tribes argue that Kalshi's operations undermine tribal sovereignty and existing gaming ordinances, directly interfering with their right to self-governance. According to the lawsuit, Kalshi's contracts are not hedging tools akin to agricultural futures, but rather "unregulated wagers on the outcomes of sporting events" that serve no economic purpose beyond gambling.

Kalshi's defense: prediction market or sportsbook?

Kalshi is expected to assert that it is a federally regulated Designated Contract Market overseen by the Commodity Futures Trading Commission, and not a gambling operation. The company has consistently maintained that its contracts are legal financial instruments designed for market participants to hedge risk, not place bets.

However, the tribes reject this framing. They argue that contracts on sporting events - like betting on whether the 49ers will win the Super Bowl - lack any real hedging or price discovery value and are, in practice, indistinguishable from traditional sports wagers.

This case could have ramifications well beyond California. Kalshi is currently embroiled in three other federal lawsuits and has received cease-and-desist letters from a minimum of seven states. Though it has won preliminary injunctions in Nevada and New Jersey, the legal uncertainty surrounding its business model remains high.

If the California tribes prevail, the case may lay a blueprint for other tribes across the US to challenge similar offerings on their lands. Moreover, Kalshi may be forced to implement geolocation technology to prevent its platform from being accessed in restricted areas - something it currently does not do.