Wisconsin Judge Rules Tribal Lawsuit Against Kalshi is Legal

While Kalshi can continue operating in Wisconsin, a recent ruling could soon change that.

This week, US District Judge William M. Conley delivered a pair of significant rulings in the legal fight between the operator and the state’s Ho Chunk Nation. Kalshi had requested that the court keep its sports prediction platform active in the state and dismiss the tribe’s lawsuit against it. 

The first was a win for Kalshi, as Conley rejected the tribe's request to ban Kalshi while its lawsuit against the operator plays out. In his ruling, the judge made it clear that the tribe failed to provide evidence of significant financial harm, and therefore didn’t warrant a temporary ban.

“While one might infer some loss of revenue, plaintiff’s assertions about current monetary harm, much less of a magnitude to present a risk to the Nation’s economic livelihood, are largely unsupported by any evidence,” Conley’s ruling reads. “Rather, it would seem likely that any interim loss is marginal at best and compensable at worst.”

The second part of the ruling was a significant loss for the prediction market leader. While Kalshi argued that the tribes lacked the authority to pursue their current lawsuit, the judge disagreed. He determined that Kalshi is offering Class III gambling in Wisconsin's sports betting market, which the operator doesn’t deny. 

As a result, Ho-Chunk’s lawsuit against Kalshi can continue.

Ruling Opens Door For More Tribal Lawsuits

The ruling from Wisconsin will have a significant impact on Kalshi, which may soon face a slew of new lawsuits.

Before this case, courts in other states have rejected the notion that tribes can sue prediction market operators under IGRA. Instead, those judges found that the Commodity Exchange Act superseded IGRA. The prediction industry claims it is federally protected as a swap under the CEA, which has helped it fend off previous lawsuits from tribes. 

With Wisconsin now delivering a different ruling, other tribal gaming groups will likely file lawsuits of their own. That includes Oklahoma, where tribes have come together to begin an effort to push sports prediction markets out. 

That’s bad news for operators like Kalshi, who are already dealing with lawsuits from states and regulators. If more lawsuits are filed by tribes and found to be protected under IGRA, it will cost the industry millions in legal fees, regardless of the outcome.