California Tribes File Lawsuits Against Kalshi, Robinhood

Opponents of sports prediction markets gained a powerful new ally this week.

A group of three California tribes filed a lawsuit in federal court on Tuesday. The lawsuit takes aim at Kalshi and Robinhood, accusing their sports prediction markets of violating the state’s gambling laws. The Blue Lake Rancheria, Chicken Ranch Rancheria, and the Picayune Rancheria tribes joined together to file the suit, which asks the court to force both companies to shut down their platform in the state.

The lawsuit alleges that sports prediction markets are a clear form of sports betting. This violates the Indian Gaming Regulatory Act (IGRA), which allows for federal recognized tribes to offer gambling. 

“Kalshi will claim that it is not offering sports gambling,” the tribal lawsuit reads. “Kalshi will tell the Court that it is a Designated Contract Market, regulated exclusively by the Commodities Futures Trading Commission (CFTC), and is merely operating a ‘prediction market’ … While masquerading as novel commodities and futures products, these event contracts are, substantively, nothing more than illegal, unregulated wagers.”

The CFTC currently has sole authority to regulate the industry, which it has been supported since President Trump took office.

Tribes Bring Key Experience, Resources to Fight

Sports betting operators have largely stood with state lawmakers to oppose these markets, but some have begun to explore creating their own. That means their resources may not be as readily available for state regulators and lawmakers who are fighting companies like Kalshi in court. Fortuantly, the three California tribes won’t have to worry about that.

California’s tribal gaming industry sees more annual revenue than Las Vegas, leading them to fiercely protect it. They have successfully fought attempts to legalize sports betting in California, as well as push out DFS and sweepstakes platforms. Their lawyers have been incredibly effective, as has the millions of dollars spent on advertising for their cause.

The experience and money from the three tribes will be a massive boost for opponents of sports prediction markets. While they won’t be sending any of that to non-tribal allies, a successfully lawsuit would provide a crucial roadmap to pushing sports prediction markets out.