Wisconsin Federal Judge Allows Ho-Chunk Nation IGRA Claims Against Kalshi to Proceed

A federal judge in Wisconsin has allowed the Ho-Chunk Nation’s claims under the Indian Gaming Regulatory Act (IGRA) against Kalshi to move forward. The ruling strengthens tribal arguments that prediction market sports event contracts accessible on tribal lands may constitute unauthorized Class III gaming under IGRA, tribal gaming ordinances, and the tribe’s compact with Wisconsin.

U.S. District Judge William Conley determined that the Ho-Chunk Nation plausibly alleged an IGRA violation. At the same time, the court dismissed the tribe’s Lanham Act and RICO claims against Kalshi and Robinhood and declined to issue a preliminary injunction. The decision marks an inflection point in the growing tension between tribal sovereignty, IGRA, and the federal framework governing prediction markets.

Judge Finds Plausible IGRA Violation by Kalshi

The Ho-Chunk Nation’s complaint asserted that Kalshi’s sports event contracts represent unauthorized Class III gaming on tribal lands. Judge Conley agreed the tribe had plausibly stated a claim under IGRA.

He rejected Kalshi’s argument that tribes lack a statutory right to sue third-party operators. The judge cited IGRA’s legislative history, which grants “United States district courts jurisdiction over actions by … a tribe or state to enjoin illegal gaming on Indian lands.”

The ruling also dismissed Kalshi’s contention that its New York headquarters and out-of-state servers mean its operations are not “located on Indian lands.” Judge Conley relied on prior IGRA cases holding that online gaming activity occurs where the bettor is physically located.

This determination reinforces long-standing tribal authority over gaming on Indian lands. It signals that tribes retain meaningful enforcement tools even against federally regulated prediction market platforms.

Court Rejects Kalshi’s UIGEA Shield Argument

Kalshi had leaned heavily on the Unlawful Internet Gambling Enforcement Act (UIGEA) as a defense. The company argued the statute shields its event contracts from tribal gaming regulation.

Judge Conley strongly rejected that position. He wrote: “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 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.” Congress explicitly stated that UIGEA should not “alter[], supersed[e], or otherwise affect[]” IGRA.

The opinion cited Ninth Circuit precedent: “There is no direct conflict between IGRA and the UIGEA and, thus, we give effect to the provisions of both statutes.” This section of the ruling limits the ability of prediction market operators to treat UIGEA as a blanket federal override of tribal law.

CEA Preemption Left Unresolved, Highlighting Court Split

Kalshi also contended that the Commodity Exchange Act (CEA) and the CFTC’s authority over designated contract markets preempt tribal regulation. Judge Conley stopped short of a definitive ruling on whether Kalshi’s sports event contracts fall under exclusive CFTC jurisdiction.

He concluded that Kalshi “have not shown that the CEA would necessarily preempt or repeal IGRA, nor limit plaintiff’s tribal authority.” The decision diverges from a recent Third Circuit ruling that sided with Kalshi on federal preemption over state gambling laws.

This leaves open a core structural question: to what extent does federal commodities regulation displace IGRA when event contracts are offered on tribal lands? The split among federal courts increases the likelihood of eventual Supreme Court review.

Risk and Limitation: No Preliminary Injunction Granted

Despite allowing the IGRA claims to proceed, Judge Conley denied the Ho-Chunk Nation’s request for a preliminary injunction. The tribe failed to demonstrate immediate irreparable harm.

The court noted the absence of evidence showing reduced casino visitation, revenue, or customer spending due to Kalshi’s operations. While acknowledging that interference with tribal sovereignty “may be significant,” Judge Conley concluded that changing the status quo was “not appropriate or even necessary.”

This limitation underscores a practical risk for tribes pursuing similar litigation. Establishing imminent economic or sovereignty harm sufficient for injunctive relief may prove challenging even when statutory claims survive dismissal. Operators like Kalshi can continue business as usual during what may be lengthy proceedings.

The court also dismissed the tribe’s Lanham Act false advertising claim, finding Kalshi’s statements were not “literally false” given the absence of clear legal authority. RICO claims against Kalshi and Robinhood were dismissed for failure to plausibly allege criminal intent or fraud.

Divergence from California Tribal Ruling Widens National Split

The Wisconsin decision contrasts sharply with a November 2025 federal court ruling involving three California tribes. In that case, U.S. District Judge Jacqueline Scott Corley denied a preliminary injunction, concluding that “the UIGEA, not IGRA, governs the challenged internet gambling.”

Judge Corley determined that Kalshi’s event contracts fall within CEA-regulated carveouts under UIGEA. The California tribes have appealed, but the Ninth Circuit recently rejected their request to align the appeal with a related Nevada prediction market case.

These differing interpretations of how UIGEA interacts with IGRA create a clear circuit split. The Wisconsin opinion reinforces that online gaming activity occurs where the bettor is located, bolstering tribal arguments that IGRA retains force even against federally regulated exchanges.

The divide over tribal authority, state versus federal oversight, and the proper classification of sports event contracts now appears headed toward higher judicial resolution.

The Bottom Line

Judge Conley’s decision represents a meaningful victory for tribal gaming sovereignty by allowing IGRA claims against Kalshi to advance while curtailing the reach of UIGEA as a defense. It does not resolve the broader CEA preemption fight and stops short of immediate operational relief for the Ho-Chunk Nation. Yet it underscores that tribes retain plausible statutory pathways to challenge prediction market activity on their lands. As court splits widen across jurisdictions, the industry approaches a defining moment where federal clarity on the intersection of IGRA, UIGEA, and commodities regulation will shape the future balance between innovation and tribal authority. Client-partners should monitor these parallel cases closely and prepare for the regulatory and strategic adjustments that may follow an eventual Supreme Court review.