Wisconsin Judge Allows Tribal IGRA Claims Against Kalshi to Proceed

Native tribes scored a significant legal victory against prediction markets, as a federal judge in Wisconsin ruled that the Ho-Chunk Nation plausibly stated claims under the Indian Gaming Regulatory Act (IGRA) over sports event contracts accessible on tribal lands.

At the same time, the court dismissed separate Lanham Act and RICO claims against Kalshi and Robinhood and did not grant a preliminary injunction.

Judge Allows IGRA Claims Against Kalshi to Proceed

The Ho-Chunk Nation’s complaint centered on the claims that Kalshi’s sports event contracts are unauthorized Class III gaming occurring on tribal lands, which violates the IGRA, tribal gaming ordinances, and the tribe’s gaming compact with Wisconsin.

U.S. District Judge William Conley agreed the tribe plausibly alleged an IGRA violation. He rejected Kalshi’s argument that tribes lack a statutory right to sue third-party operators under IGRA.

The judge wrote that IGRA legislative history further explains:

Congress intended to grant ‘United States district courts jurisdiction over actions by … a tribe or state to enjoin illegal gaming on Indian lands.’”

The ruling also rejected Kalshi’s argument that because it’s headquartered in New York and hosts servers elsewhere, its online operations do not amount to conduct “located on Indian lands.”

The court relied heavily on prior IGRA rulings, in which multiple courts found that online gaming activity occurs where the bettor is physically located, rather than where the servers are.

Judge Rejects Broad UIGEA Shield Argument

A major component of the ruling involved Kalshi’s reliance on the Unlawful Internet Gambling Enforcement Act (UIGEA). The company had argued that the statute effectively shields its online event contracts from tribal gaming regulation.

Conley strongly rejected that interpretation, writing:

Just because Kalshi’s conduct is not prohibited by the UIGEA does not make its offering of sports betting contracts legal anywhere, much less on Indian lands where it is expressly prohibited.”

The court further described UIGEA as a “non-substantive, payment-processing law” that “Congress narrowly tailored to prohibit using certain kinds of financial transactions to fund gaming that is already unlawful.” UIGEA neither legalizes gambling nor supersedes other gaming laws, including IGRA.

Conley additionally emphasized that Congress explicitly stated UIGEA should not “alter[], supersed[e], or otherwise affect[]” the application of IGRA.

The opinion also cited prior Ninth Circuit precedent stating:

There is no direct conflict between IGRA and the UIGEA and, thus, we give effect to the provisions of both statutes.”

Court Stops Short of Fully Resolving CEA Preemption Fight

One of Kalshi’s arguments was that the Commodity Exchange Act (CEA) and the Commodity Futures Trading Commission’s (CFTC) authority over designated contract markets preempt tribal gaming regulation.

Conley stopped short of definitively resolving whether Kalshi’s sports event contracts fall under the CFTC’s exclusive jurisdiction. However, he concluded that Kalshi failed to demonstrate that the CEA clearly preempts the IGRA.

He wrote:

Defendants have not shown that the CEA would necessarily preempt or repeal IGRA, nor limit plaintiff’s tribal authority.”

The decision differs from a recent Third Circuit ruling that sided with Kalshi on federal preemption over state gambling laws.

Court Denies Preliminary Injunction

Despite allowing the IGRA claims to proceed, the court denied the Ho-Chunk Nation’s request for a preliminary injunction against Kalshi.

Conley concluded that the tribe failed to demonstrate immediate irreparable harm. He wrote that despite Kalshi’s operations, the Ho-Chunk has not provided evidence of reduced casino visitation, revenue, or customer spending.

In terms of non-economic harms, the judge acknowledged that interference with tribal sovereignty “may be significant”. However, he concluded that changing the status quo is “not appropriate or even necessary.”

Lanham Act and RICO Claims Dismissed

The court dismissed the tribe’s false advertising claim under the Lanham Act, which challenged Kalshi’s marketing ads describing itself as a legal nationwide sports betting platform.

Conley wrote that under the Lanham Act, a statement must be “literally false”. He concluded that Kalshi’s sports event contracts “are not actionable as false or misleading statements” because there’s no clear, legal authority on the issue.

The judge also dismissed the tribe’s RICO allegations against Kalshi and Robinhood. It found the complaint failed to plausibly allege criminal intent or fraud.

Wisconsin Ruling Diverges From California Tribal Case

Conley’s decision arrives as multiple federal cases involving Kalshi are developing nationwide, including a similar case by three California tribes.

Notably, the Wisconsin ruling now sharply diverges from an earlier November 2025 federal court decision involving those California tribes.

In that ruling, U.S. District Judge Jacqueline Scott Corley denied the tribes’ request for a preliminary injunction. Corley concluded that “the UIGEA, not IGRA, governs the challenged internet gambling.”

The California court reasoned that the UIGEA specifically addresses interstate internet gambling. It found that Kalshi’s event contracts fall within CEA-regulated carveouts under UIGEA. The tribes have filed an appeal, and last week, the Ninth Circuit rejected their request to align their appeal with a Nevada-related prediction market case.

The California and Wisconsin decisions now reflect sharply different interpretations of how UIGEA interacts with IGRA in prediction market litigation.

The Wisconsin opinion emphasized that online gaming activity occurs where the bettor is physically located. It reinforced tribes’ arguments that online sports event contracts may still fall within IGRA even when operated through federally regulated exchanges.

The divide over tribal issues widens the split among courts over state versus federal oversight, increasing the likelihood of an eventual Supreme Court review.