This week, Kalshi was served with a federal lawsuit from the Ho-Chunk Nation, a recognized tribal group in Wisconsin that operates various gaming establishments with permission to conduct sports betting on tribal grounds under a state agreement. 

The main issue for the plaintiffs is that the gambling takes place not within their casinos, but through mobile devices. A 47-page lawsuit was filed in the Western District of Wisconsin, alleging that Kalshi represents sports betting as ‘event contracts’ that allow users to buy ‘yes’ or ‘no’ positions on the outcomes of sports events, which the tribe argues violates the Indian Gaming Regulatory Act granting indigenous tribes exclusive authority over gaming regulations on their lands. 

Kalshi markets itself as a regulated derivatives exchange where users can trade based on real events, such as sports results and political contests, and has attracted attention for allowing individuals as young as 18 to participate in what the tribe calls ‘bets’ on various matters, including NFL games and March Madness basketball competitions. 

The lawsuit highlights that 18-year-old high school students across the United States, including those living on Indian reservations, are using their phones to bet on almost every sporting event worldwide. The core of the legal action revolves around whether Kalshi’s contracts related to sports events qualify as gambling according to federal regulations. 

While Kalshi presents its services as regulated commodity contracts under the oversight of the Commodity Futures Trading Commission (CFTC), the Ho-Chunk Nation argues that these offerings are essentially sports bets disguised in financial terminology. 

The tribe cites Kalshi’s own promotional materials as evidence, pointing to social media posts where the company advertised itself as ‘The First Nationwide Legal Sports Betting Platform’ and claimed ‘Sports Betting Legal in all 50 States on Kalshi.’